Oil Prices Rose One Day Ahead of An Important Meeting

Oil prices rose on January 3 as the market kicked off the new year on a positive note with suppliers in focus ahead of an important meeting, although surging Covid-19 cases continued to affect demand sentiment. 

Brent crude gained 56 cents or 0.72% to $78.34 a barrel as of 07:10 GMT. U.S. West Texas Intermediate (WTI) crude futures advanced 52 cents or 0.69% to $75.73 a barrel.

Libya’s state oil firm made an important announcement on the first day of 2022. It stated that the country’s oil input would be reduced by 200,000 barrels per day for a week due to maintenance on a main pipeline between the Samah and Dahra fields. 

In the meanwhile, OPEC+ will probably stick to their plan to add 400,000 barrels per day of supply in February.

Oil prices and important factors

Oil prices gained around 50% in 2021, triggered by the global economic recovery from Covid-19 and producer restraint. Prices rose even as infections reached record highs around the world.

Oil analysts lowered their price forecasts for 2022. They lowered their price forecasts due to the omicron variant as well as risks of a supply gut as producers pump more oil. 

Let’s have a look at a survey. According to 35 economists and analysts, Brent crude would average $73.57 a barrel in 2022. Importantly, it is the first reduction in the 2022 price forecast since the August poll.

Now, let’s move to WTI. U.S. West Texas Intermediate is projected to average $71.38 per barrel this year, versus the previous month’s $73.31 consensus. 

U.S. energy firms increased the number of oil and natural gas rigs for a record 17 months in a row. 

Last but not least, U.S. crude oil production reached 11.47 million barrels per day in October, up 6% from a month earlier, as output jumped in the Gulf of Mexico as the region recovered from hurricanes based on the information provided by the Energy Information Administration.