With both the physical and futures markets rallying, and increased geopolitical premium, market observers are looking towards the $100 mark for oil prices. Prices of physical crude cargoes have rallied this year, signaling resilient global oil demand even in the face of record-high COVID cases in the Omicron wave. The tightness in the physical crude prices is reflected in the oil futures market where the backwardation—the state of the market signaling tight supply—has increased for both major benchmarks, Brent and WTI. The tight physical supply of oil points to further gains in the futures market, where Brent Crude prices hit a fresh seven-year high at over $87.80 a barrel early on Tuesday—the highest price for Brent since October 2014. Refinery maintenance in the spring could also slow down the physical oil market, analysts say.

Source: The North Africa Journal January 19, 2022 07:31 UTC