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Tuesday, May 24, 2022
HomeBusinessCrude oil prices hit seven-year highs on supply concerns

Crude oil prices hit seven-year highs on supply concerns

Crude oil’s bull run is showing no signs of slowing, as prices surged around 2 percent on Tuesday to their highest levels since October 2014.

As of 1320 hours GMT, Brent, the international benchmark for two-thirds of the world’s oil, gained $1.13 (+1.27 percent) to reach $87.58 a barrel. The benchmark hit $87.85 a barrel during the session.

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On the other hand, the US West Texas Intermediate (WTI) price reached $85.38 a barrel, up by $1.56 (+1.86 percent). WTI crude futures rose to $85.53 during the early trading.

The price for Opec Basket was recorded at $85.46 a barrel with a gain of 0.87 percent, Arab Light was available at $87.62 a barrel with an increase of 1.55 percent and the price of Russian Sokol jumped to $89.66 a barrel with an increase of 1.54 percent.

The supply concerns are giving the market a solid boost. Frantic oil buying, driven by supply outages and signs the Omicron variant will not be as disruptive as feared for fuel demand, has pushed some crude grades to multi-year highs, suggesting the rally could be sustained a while longer. The Opec+ is still nowhere near pumping to its overall quota, and this narrowing cushion could turn out to be the most bullish factor for oil prices over the coming months.

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Crude oil prices have posted four consecutive weeks of gains, which has been the longest winning streak since October 2021, in evidence that the demand recovery remains robust as fears about the effect of Omicron die down.



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