ISLAMABAD
Crude oil prices increased for the second straight week up to 2.15 percent after 4.13pc rise in the preceding week.
According to details, the US West Texas Intermediate (WTI) reached $75.21 from $73.79, up by 1.92 percent during the week. The low for the week reached $72.60 on Monday while the high for the week was on Thursday at $77.24.
Similarly, Brent, the international benchmark for two-thirds of the world’s oil, increased 2.15 percent during the week to reach $77.78 from $76.14 a barrel. The low for the week reached $75.95 on Monday while the high for the week was on Thursday near $80.10.
During the week, the price for Opec Basket was recorded at $74.23 a barrel, Arab Light was available at $77.54 and the price of Russian Sokol remained $77.87 a barrel. No change was recorded in the prices of these three benchmarks during the week.
However, on a year-on-year basis, Brent gained 52 percent as it surged to the current level from $51.17 on December 31, 2020 whereas US crude gauge West Texas Intermediate (WTI) gained 58 percent from $47.97 per barrel on December 31, 2020 to the current level.
Oil prices hit fresh weekly highs on Thursday last before backing off slightly. The rally over the last week was spurred by positive pandemic developments, including studies showing Omicron, the new variant of the coronavirus, will be less severe. The former development, coupled with a slowdown in the acceleration of the transmission rate in parts of Europe including the UK, has taken the pressure off of authorities to implement tougher economic restrictions.
The other factor that helped push crude oil prices higher last week was that the US inventories were revealed to have seen much larger than expected stock drawdowns in the preceding week. Moreover, oil and gas rigs rose to their highest level since April 2020, a leading indicator of increased US output in the coming months.
On the other hand, as 2021 came to a close, energy companies and organisations began looking at 2022 and started making plans based on supply and demand expectations. Three organisations that provide market information are the International Energy Agency (IEA), based in Paris and representing countries that are net importers of crude oil; the Energy Information Administration (EIA), based in Washington and the data-collection and forecasting arm of the Department of Energy; and the Organisation of Petroleum Exporting Countries (OPEC), which is a cartel of 13 countries that produce and export crude oil around the world.
These organisations issued their forecasts recently, and the global economy will improve in 2022 by 4.2 percent, according to OPEC’s economic analysis. Even though all three organisations agree the global economy will continue to improve, the impact of the pandemic remains a significant concern. The EIA, however, forecasts Brent, which is traded on the international market, to average between $60 and $70 per barrel in 2022. West Texas Intermediate usually trades $2 to $4 less than Brent.
