Crude Oil prices are soaring persistently and there is no turning back, could reach $100/ barrel in March

Oil prices are surging continuously since the start of the month and are likely to reach USD 100 per barrel by March 2022 acc. to ChemAnalyst due to the growing imbalance of supply and demand in oil markets. In spite of the commitment by OPEC+, there is no evident improvement in the supplies, rather the production is quite below the expected levels. Hence, Oil rallies as demand from both the energy and petrochemical sector outpace supply.

Exacerbating unrest in Kazakhstan, Libya supply outages along with geopolitical tensions between Russia and Ukraine, over a potential invasion by Russia on Ukraine are worsening the supply shortage pushing up the Crude futures. Moreover, a fire in the pipeline on 18th January carrying crude oil out of Iraq (Kirkuk oil fields) to the Turkish port of Ceyhan for export also send ripples to the values of Crude Oil, aggravating the supply chain fears as Iraq is the second-largest producer in the OPEC organization.

Additionally, a drone attack on the UAE in the industrial area close to the Abu Dhabi airport triggered volatility in the Crude oil values as its oil fields are under the threat of another drone attack prompting supply constraints. Brent Crude Oil has reached a seven-year high closing at USD 89 per barrel while WTI closed at USD 87/barrel on 20th January.  Crude oil could only ease with the increase in production by OPEC+ and its allies in the near term.

According to ChemAnalyst, no relief is expected in Crude Oil futures in the near term backed by the wide gap in the demand and supply chain, and its value may reach up to 100/barrel in the last month of the quarter. Soaring crude oil values would trigger the cost of petrochemicals along with all the value chain products in the forthcoming months.