Brent Price Hits $96 after IEA Demand Forecast
Amidst tight supply, Brent price hits $96 per at the global oil market on Monday after demand forecast detail higher demand expectation for the year 2022. Oil prices closed trading on Friday more than 3% higher.
The upswing commencing after the International Energy Agency released its latest demand forecasts, and then picked up the pace amid concerns about an escalation of the Russia-Ukraine conflict, Commerzbank said in a Monday note.
Brent has reached $96 per barrel Monday morning, its highest level since October 2014, while West Texas Intermediate is just shy of $95 per barrel, the bank noted.
If a military escalation does ensue in Ukraine, far-reaching sanctions on Russia may hit its energy and finance sectors, which could hamper deliveries of crude oil and natural gas, according to Commerzbank.
How prices perform in the coming days would depend largely on the news surrounding the Russia-Ukraine conflict, with Brent expected to exceed $100/b and the natural gas price projected to rise above the 100-euro-per-megawatt-hour mark, the bank said.
Meanwhile, the IEA revised its global oil demand forecast this year upwards. The agency now projects demand to average 100.6 million barrels per day, which is 900,000 barrels per day more than the previous forecast, Commerzbank said.
This means that the oil market was undersupplied to a greater degree than previously thought last year, and the supply surplus would be considerably smaller this year, the bank noted.
The IEA expects the market to be balanced in the current quarter, with supply outstripping demand in the coming quarters. Read: Oil Prices Near 7-Year High on Tight Supply
The supply increase would depend on the extent to which the Organization of the Petroleum Exporting Countries and their allies, or OPEC+, expands oil production, Commerzbank said. #Brent Price Hits $96 after IEA Demand Forecast
