Status: 01/18/2022 10:12 a.m
The rise in oil prices has recently accelerated. The price for the Brent variety has now climbed to its highest level since October 2014. The list of price drivers is long.
The oil price in the Far East climbed to its highest level in more than seven years this morning. The futures contracts on the North Sea variety Brent rose at times to $ 87.55 per barrel (159 liters). This is the highest price since the end of October 2014. A similar development can be expected today for the American reference variety WTI.
What’s behind the increase? Several factors are currently driving prices. Experts blame the escalation in the Yemen conflict after the Houthi rebels claimed responsibility for attacks in Abu Dhabi for the current price hike. The dispute with Russia is also seen as a risk to the security of oil supplies.
Also fundamental reasons
A fundamental reason for the price increase, which has been going on since early December, is the expectation that the negative effects of the omicron variant of the corona virus on the global economy will be limited. This has recently led to surprisingly robust oil demand.
At the same time, market participants worry that the OPEC+ oil cartel will not be able to deliver on its promised 400,000 barrels per day increase in production every month. “Indications are that this is not going to be easy and the group is way off target after a period of underinvestment and defaults. This should continue to support oil prices,” said Craig Erlam of US broker Oanda.
Bad news for drivers
Oil prices have increased by more than 10 percent this year. Since the corona-related low in spring 2020, the increase in Brent has totaled almost 450 percent. The consequences can be read at the petrol pump and on the heating oil bill.
In this country, there is also an exchange rate effect. Since the euro has been falling in recent months due to rising interest rate expectations in the USA, but crude oil is paid for in dollars, oil prices have risen even more sharply when calculated in euros. This is not a favorable situation for motorists. The diesel price had recently climbed to its highest level ever.