The monthly average U.S.-dollar price of West Texas Intermediate (WTI) crude oil jumped $11.51 (+16.1%), to $83.22 per barrel in January. That increase occurred within the context of a stronger U.S. dollar (broad trade-weighted index basis -- goods and services), the lagged impacts of November’s increase of 703,000 barrels-per-day (BPD) in the amount of petroleum products demanded/supplied (to 20.6 million BPD, and accumulated oil stocks wallowed at the bottom of the five-year-average range (January average: 415 million barrels).
Selected
highlights from the 28 January 2022 issue of OilPrice.com’s Oil &
Energy Insider include:
For the first time in seven years, Brent prices surged past $90 per barrel [during the week ending January 28], buoyed by a series of bullish factors. First, low inventories remain the number one reason underlying investment banks' $100 per barrel short-term forecasts. The fact that US commercial stocks just fell for the third time in a row has not helped that. Second, with much of Europe captivated by the prolonged Russia-Ukraine standoff, speculation that Russian oil might be embargoed from the market added another geopolitical premium to prices. Simultaneously, supply scarcity remains a global worry as corroborated by steep backwardation -- the Brent six-month market structure was almost at $7 per barrel this week -- with very little indication that OPEC+ would be willing to churn out more than it is supposed to under the terms of its agreement. Things are looking very bullish for oil markets indeed.
Saudi Aramco Hits Out at Energy Transition. Saudi Aramco CEO Amin Nasser said the current
transition towards a sustainable energy future is not going smoothly,
highlighting the need to invest in oil and gas if the markets are to avoid the
current tightness seen right now in Europe and parts of Asia.
US Judge Annuals Gulf of Mexico Auction over Climate Concerns. A US federal judge annulled
the latest Gulf of Mexico Lease Sale 257 held last November -- assumed to be
the last under the Biden Administration -- arguing that the auction failed to
assess the climate impact of prospective offshore drilling.
Key US Shale Pipeline Jeopardized. The US Court of Appeals has nixed the federal permit issued towards the Mountain Valley Pipeline, a key conduit that would send Appalachian gas to Virginia and is more than 90% complete, arguing that government approvals did not consider erosion impacts.
The foregoing comments represent the general economic views and analysis of Delphi Advisors, and are provided solely for the purpose of information, instruction and discourse. They do not constitute a solicitation or recommendation regarding any investment.
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