Rising geopolitical tensions have been driving the price of oil up, since the Russia-Ukraine conflict might create an energy crisis, as it threatens to disrupt the distribution of oil and natural gas. In addition, the EU and the UK are drafting plans to enforce sanctions on new Russian gas projects in the event of a Russian attack against Ukraine.
In addition, oil supply cannot be increased swiftly enough to meet rising demand and existing inventories are tight. This week the upcoming OPEC-JMMC meeting will be in focus, where the organizations will discuss their future policy and are expected to announce oil production levels. Another 400,000 barrel per day increase is predicted, but the question is whether the organization will be able to meet its output goal, as some of its members are struggling to increase production.
On the other hand, oil production in the US is on the rise, as an EIA report published on Monday showed that production rose over 2% in November, indicating an increase in shale output. US Crude Oil Inventory data are also scheduled to be released on Wednesday and may affect the price of Oil.
Oil price was volatile on Tuesday, with WTI still trading in an uptrend and reaching $89.16 per barrel, close to last week’s peak. WTI price rose above $89.2 per barrel last week, registering a new 7-year high and many analysts predict it will reach three-digit figures within the year. In case the uptrend is reversed, support may be found at the $82.4 per barrel level and further down around $78.8 per barrel and $77.8 per barrel.
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