The last couple of days saw crude oil and WTI prices catapulted to seven-year highs, amidst rising supply worries and growing geopolitical tensions. Brent crude rose above $88 per barrel and WTI price to over $86 per barrel as concerns grew that diminishing oil inventories may not cover the rising oil demand.
The International Energy Agency in its monthly oil market report released on Wednesday, estimated that the demand for the commodity will not be affected significantly by the surge of Omicron cases and will rise within 2022 further than previously anticipated, while supply from OPEC may shrink. Goldman Sachs has also released a report predicting that Brent crude price would climb to over $96 per barrel within the year.
Geopolitical tensions mount both between Russia and Ukraine, as well as in the middle east, and hold the price of oil at high levels. US President Joe Biden predicts that the crisis between Russia and Ukraine will escalate, and Washington is making last-minute attempts to diffuse the situation. A key pipeline that transports oil to Europe from Iraq via Turkey was hit by an explosion on Wednesday and earlier in the week, Yemen’s Houthis launched a drone attack in Abu Dhabi airport.
On Thursday, WTI managed to hold on to its gains, testing the $85.7 per barrel resistance level throughout the day. The outlook for the commodity is bullish and if it rises above the $85.7 per barrel level, it may continue to trade along its uptrend. In case the trend is reversed, support may be found at the $77.8 per barrel level.
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