Brent crude price, yesterday, slipped to $88.63 per barrel on the back of speculation that OPEC+ may decide to boost supply in the market, coupled with expectations of a rise in U.S inventories. Brent hit the highest price of $91.70 a barrel last Friday before it spirally came down to $88.63 a barrel few hours ago, a development, which may have dashed the hopes of many market observers that the price of crude is on ascendancy and could reach $100 per barrel soon. This happens, as the Oganisation of the Petroleum Exporting Countries (OPEC) and allies, together known as OPEC+ are looking forward to maintain their policy of gradual production increases soon. “We view growing potential for a faster rampup at this meeting, given the pace of the recent rally and the likely pressure from importing nations,” the bank said in a Jan.
31 report, adding that expectations remained “evenly balanced” between an accelerated response and a status quo increase.” Goldman Sachs added. Brent crude was down 63 cents, or 0.7 per cent, at $88.63 a barrel by 1430 GMT. U.S. West Texas Intermediate crude slipped 55 cents, or 0.6 per cent, to $87.60. Oil was also pressured by expectations that this week’s U.S. supply reports will show an increase in crude stockpiles. Analysts expect stocks to have risen by 1.8 million barrels. OPEC undershot its promised output boost in January, a Reuters survey found, and the rally was expected by other analysts to persist.
“The oil market is currently unreservedly bullish,” said Tamas Varga of oil broker PVM. “It is international tension, the perception of tight supply and the cold winter that are the most important factors behind the strength.” Rising differentials in the physical crude market imply concern about tight supply, Varga said. One of the North Sea crudes that underpins Brent, Ekofisk, was bid on Monday at its highest in more than a decade.
