Oil Benchmark Increases To $85 Amid Omicron Impact

The international Brent crude oil, on Wednesday, increased by $1.42 to $85.14 per barrel amid the impact of COVID-19.

Naija News gathered that OPEC crude oil production is expected to rise by 2.5 million barrels per day to average 28.8 million barrels per day in 2022 and by a further 100,000 barrels per day in 2023 to average 28.9 million barrels per day.

According to the Senior Market Analyst, Asia Pacific at OANDA, Jeffrey Halley, said Brent could increase $100 per barrel this quarter if the Omicron variant reduces and OPEC increase oil production.

Halley stated that Bent could move towards $100 per barrel this quarter if China doesn’t suffer a sharp slowdown in the economy.

He said, “Assuming China doesn’t suffer a sharp slowdown, that omicron actually becomes omi-gone, and with OPEC+’s ability to raise production clearly limited, I see no reason why Brent crude cannot move towards $100.00 in Q1, possibly sooner.

“Having said that, I acknowledge there are plenty of variable outcomes in the previous sentence, the biggest threat being omicron in China, India, and Indonesia.”

Rigzone reported on Tuesday that the US Energy Information Administration raised its Brent spot average price forecast for 2022, citing its January short-term energy outlook has revealed.

The organisation now sees Brent spot prices averaging $74.95 per barrel this year, which marks a $4.90 increase on its previous 2022 projection of $70.05, which was made in the EIA’s December STEO.

Looking ahead to 2023 for the first time, the latest STEO forecasts that average Brent spot prices will drop to $67.50 per barrel next year. Brent spot prices averaged $70.89 per barrel in 2021, the EIA’s January STEO highlighted.

The organisation expects global liquid fuels consumption will grow by 3.6 million barrels per day in 2022 and by 1.8 million barrels per day in 2023.

The EIA notes that its latest STEO continues to reflect heightened levels of uncertainty as a result of the ongoing Covid-19 pandemic.