BREAKING: Oil Price Hits 7-Year High As Both Benchmarks Trade Above $90

Oil Price Hits 7-Year High As Both Benchmarks Trade Above $90

Brand News Day Nigeria reports that the crude oil price has been bearish since the starting of 2022, with the benchmarks extending their rally for seven consecutive weeks, as ongoing worries about supply disruptions fueled by frigid U.S. weather and ongoing political turmoil among major world producers.

Tight oil supplies pushed the six-month market structure for WTI into steep backwardation of $9.06 a barrel on Friday, its widest since September 2013.

This online news website, however, noted that the black liquid has been having a fantastic run in 2022, as the Benchmarks Trade surges to an All-Time-High amount since the beginning of the year 2022.

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The global benchmark, the Brent crude gained 3.6% for the week, settling the week, trading at $93.27 a barrel having earlier touched its highest since October 2014 at $93.70.

BREAKING: Oil Price Hits 7-Year High As Both Benchmarks Trade Above $90

The United States benchmark, the West Texas Intermediate crude gained 6.3% on the week to settle at $92.31 a barrel after trading as high as $93.17, its highest since September 2014. This is the longest rally by both benchmarks since October.

The market’s surge accelerated in the last two days as buyers piled into crude contracts due to expectations that world suppliers will continue to struggle to meet demand.

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Notably, the United States jobs figures were surprisingly strong in January, despite the presence of the Omicron variant of the COVID-19.

According to market strategists, crude prices, which have already rallied about 20% so far this year, are likely to surpass $100 per barrel due to strong global demand.

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Winter storms bringing icy conditions in the United States, particularly in Texas, also fueled supply fears as the extreme cold could cause production to shut temporarily, similar to what happened in the state a year ago.

Backwardation exists when contracts for near-term delivery are priced higher than those for later months – and is reflective of near-term demand that encourages traders to release oil from storage to sell it promptly.