Five reasons that support this... Oil prices may exceed $100 per barrel!

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[size=52]Five reasons that support this... Oil prices may exceed $100 per barrel![/size]

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Oil prices recorded their highest level in more than 7 years with rising demand and declining inventory, which represents a burden on consumers, but it seems that the crisis will not witness a breakthrough with expectations that oil prices will exceed $100 per barrel.
High fuel prices are hampering efforts to combat high inflation rates[/size]
[size=45]Oil prices fluctuate around $90, equivalent to €79 per barrel, which represents a repeat of the 2014 scenario due to increasing demand and reduced concerns about the strength and continuity of the economic impact of the Omicron variant of the Corona virus.[/size]
[size=45]During last week, the price of Brent crude oil penetrated the $88 per barrel barrier during Wednesday’s trading for the first time in seven years, which also represents a visit estimated at more than a quarter of the prices recorded after the emergence of the new Covid variant, while the price of West Texas Intermediate crude approached the threshold of... $86 per barrel.[/size]
[size=45]In light of this, analysts and experts from the US investment bank Goldman Sachs raised their expectations for oil prices to breach the $100-per-barrel barrier this year, which will confuse policies to combat high inflation rates, which have reached their highest levels in major economies, especially in the United States and Germany.[/size]
[size=45]In an interview with DW, Edward Moya, chief market analyst at OANDA, said: “The energy sector, especially traders, is preparing for oil prices to reach $100 per barrel, as demand for crude oil appears to be returning to its correct track to levels before the Corona epidemic, while supplies are likely not to be seen.” A breakthrough until the end of the year.”[/size]
[size=45]Experts believe that there are five main reasons behind expectations that oil prices will exceed $100 per barrel:[/size]
[size=45]High demand for oil[/size]
[size=45]The world is witnessing a rise in demand for oil despite the rise in Coronavirus infections across the globe, but evidence that the Omicron mutant will not represent a major obstacle has fueled demand for oil as was initially feared.[/size]
[size=45]Although travel and airport traffic has not yet reached levels before the Corona epidemic, it has largely succeeded in withstanding the outbreak of the Omicron mutant so far, which has increased the demand for jet fuel in Europe, while the increase in diesel prices was also driven by an increase in demand for heating oils. Amidst the rise in prices of natural gas, transportation fuels, and others.[/size]
[size=45]In this context, Golden Sachs experts say that it appears that the impact of the Omicron mutant on travel and transportation has not resembled the impact of the Delta mutant strain outside China yet, so it is expected that oil imports, which reached 0.7 million barrels per day in January, will dissipate by March. “Next March.”
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Air traffic is expected to witness a significant recovery during the current year[/size]
[size=45]It is also expected that the demand for fossil fuels will only increase during the summer holidays in the countries of the Northern Hemisphere with the start of the holiday season.[/size]
[size=45]Obstacles to increasing supply[/size]
[size=45]Sudden interruptions in oil supplies in Libya, Kazakhstan, and Ecuador have reduced the current supply of oil and gas, but overall, the crisis of undersupply and oversupply will not improve any time soon.[/size]
[size=45]The “OPEC Plus” coalition, which consists of members of OPEC and its allies, led by Russia, is gradually reducing the record production cuts that were agreed upon in 2020 to confront the collapse in demand due to the pandemic.[/size]
[size=45]While the alliance is working to increase the targeted monthly production by 400,000 barrels per day, the actual increase in production has not been met, as oil producers in Russia, which is the second largest producer in the OPEC Plus alliance, and Nigeria are still suffering from a lack of investments as well as related issues. By operation.[/size]
[size=45]This would make the heavyweight countries in OPEC, especially Saudi Arabia, the UAE and Iraq, the only ones capable of increasing production within a short period due to the availability of oil reserves.[/size]
[size=45]However, experts stress that reserve capacities have reached their lowest level in years, in addition to being insufficient to enhance confidence among traders so that they can absorb any shocks that may result from a disruption in oil supplies, especially when global oil stocks fall below pre-pandemic levels. Corona as the contraction continues.[/size]
[size=45]Tension between Russia and Ukraine[/size]
[size=45]In addition to the reasons for experts’ expectations that oil prices will exceed the $100 per barrel mark, there are political tensions around the world, especially the escalation of tension between Russia on the one hand and the United States and European countries on the other hand due to the situation in eastern Ukraine.[/size]
[size=45]This crisis - especially in the event that Russia invades Ukraine - poses a major threat to oil markets.[/size]
[size=45]In this regard, Laudio Galimberti - Senior Vice President of Analysis at the Rystad Energy Consulting Company - said: “The outbreak of war between Russia and Ukraine will lead to a significant rise in natural gas prices and the oil sector will be indirectly affected due to the shift from gas to oil in power generation.”[/size]
[size=45]In an interview with DW, he added, "A direct impact on oil production facilities in Siberia would be unlikely."
Tension in the Middle East[/size]
[size=45]The matter is not limited to the tension in eastern Ukraine, but also includes the political crises ravaging the Middle East region, especially since oil markets are particularly sensitive to geopolitical tensions.[/size]
[size=45]Consequently, if the deteriorating political situation in Kazakhstan and Libya - two of the world's largest oil producers - continues, oil prices will increase.[/size]
[size=45]Also, large oil supplies from the Middle East region may be at risk if tensions escalate between Saudi Arabia and Iran following drone attacks launched by the Iranian-backed Houthi militias that targeted the UAE.[/size]
[size=45]In this context, Edward Moya, chief market analyst at OANDA, explained that “geopolitical tensions are like a joker card for crude oil prices, as the primary incentive is likely to be rising prices heading upward.”[/size]
[size=45]The magic of Wall Street[/size]
[size=45]Economic analyst Javier Blas at Bloomberg said that once oil prices break the $90 per barrel barrier, this will result in the excitement of Wall Street traders who will eventually raise oil prices to more than $100 per barrel.[/size]
[size=45]Blass added in an article, “Issues related to the supply and demand base push oil prices, such as OPEC Plus production plans and issues related to the market and automobile transportation in America, which are the most important. This is the time when the magic power of Wall Street appears, meaning prices rise or fall, exceeding the fundamentals.” Basic physical. It seems that the oil market is on the cusp of witnessing such moments.”[/size]
[size=45]The economic analyst added that there is interest in purchasing power by oil traders who have created strong portfolios of purchase options contracts, which gives them the right to buy oil at a specific price and date when demand for oil and its prices decreased during the Corona epidemic.[/size]
[size=45]He attributed oil prices exceeding $100 per barrel to issues related to purchase contracts, adding, “Investors in hedge funds and other major investors are waiting to obtain a much greater prize, represented by the rise in oil prices to significant levels, enabling them to fully activate purchase options contracts and enjoy the right to purchase oil.” The crude price is lower than its market price.[/size]
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