Brent Crude Oil hits $90 per barrel amidst solid demand and strengthening refining margins
- 27-Jan-2022 4:38 PM
- Journalist: Rene Swann
Crude Oil has been surging consistently since the start of January 2022, on the back of robust demand from the petrochemicals and energy sectors amid supply constraints. Ukraine and Russia tensions are exacerbating the shortage of oil supplies consequently influencing the crude values as Russia is the third-largest producer of Crude oil. Hence, Brent Crude Oil closed on $90/barrels on 26th January, the highest in the last seven years.
Moreover, strengthening refining margins are also supporting the pricing trend of Crude in this period. An ongoing turmoil in Kazakhstan is also responsible for hike in Crude oil offers as it is a major oil producer with an output of more than 1.6 million barrels per day. Additionally, drone attack on three oil tankers by Yemen’s Houthi rebels in Abu Dhabi has immediately triggered the rise in the prices of Crude Oil. Extended unrest in Saudi Arabia has further skyrocketed the oil prices. Hence, soaring Crude Oil prices are anticipated to ignite concerns of higher inflation in international markets.
Besides, Saudi Arabia is likely to increase the official selling price of all its crude grades in Asia in the upcoming month due to elevated Middle East benchmarks that would result in an increment in the prices of Crude going to Asia. Factors such as buoyant demand amid omicron wave and rising refining margins for jet fuel and gas oil are going to further stimulate Oil prices in the Asian markets.
Brent Crude oil is an international benchmark price for purchases of oil in the world. It is extracted from the North Sea oil fields including Brent, Forties, Oseberg and Ekofisk.
Acc. To ChemAnalyst, Crude oil prices are likely to propel further and may reach $100/barrel in March as oil production could be negatively impacted by the potential conflict between Russia and Ukraine. Moreover, Asian markets are expected to witness a surge in Crude Oil futures as Saudi Arabia is going to raise OSP of all its Crude grades.