Retailers are on ‘high alert’ due to oil glitches reaching peak in seven years

Oil prices rose sharply in early 2022, more than seven years this week as traders rushed to close expectations for a return to normalization, slowing down and the country’s volatility.

Brent – a global oil brand – sold a barrel of more than $ 87 Tuesday for the first time since 2014, rising to $ 89.50 on Thursday before lowering some of its profits.

“People are alert,” Amrita Sen told consultant Energy Aspects. “Whatever it is that is affecting the downturn or wanting to go down, the market is reacting.”

The first uprising came after three Yemeni rebels were assassinated in the United Arab Emirates. The incident did not affect oil production, but it appears to have upset traders.

Prices rose again after a Turkish explosion halted exports through the Kurdish region of Iraq. The situation is alarmed by the possibility that the US will impose sanctions on Russia if it invades Ukraine.

With the help of the fillips, Brent futures have already increased by nearly 12 percent in January, after a 50 percent rise last year, while fears diminished over the Omicron coronavirus divergence delaying the global economic recovery.

Now, some experts predict that oil could exceed $ 100 this year. Such a situation could add new oil to the rapid rise in global prices.

U.S. Bank Goldman Sachs said this week that it expects Brent to reach $ 100 a barrel in the third quarter and reach $ 96 a barrel by 2022, rising to $ 105 a barrel in 2022.

Rising oil prices have been fueled by the opinion of some industry experts that oil prices will rise while the global economy continues to grow, leaving less power to meet future risks.

A group of OPEC producers, led by Saudi Arabia and its allies, including Russia, have pledged to change their cut cut at the start of the epidemic by 400,000 barrels a day each month in 2022.

But since the agreement was reached in July, only a few countries except Saudi Arabia and the UAE have been able to take action on a monthly basis.

In December, OPEC + increased production by only 250,000 b / d, according to the International Energy Agency, Nigeria, Angola and Malaysia all made less. Russia also released less for the first time since 2020.

The December deficit means the group is generating 790,000 b / d less than originally planned, the IEA said in its latest monthly oil report, released this week.

The U.S. and other major oil buyers have repeatedly called on the Opec + team to increase their supply. But even if they agree to set a monthly goal, technical and operational issues in a number of countries mean the group will continue to fail.

“Indeed, OPEC + does not have the powers that it claims to have on paper,” said Sen.

With the global demand expected to return to a global epidemic of about 100m b / d by 2022, there are questions about the availability of respiratory power to deal with any operational or political disruption.

In the past, economists and policy makers have strongly argued that conservation power – often defined as a supplement that can be brought online in 30 days and stored for 90 days – about 5 percent of the world’s oil, to prevent price fluctuations.

The current availability of quantity of additional products available varies. The IEA predicts that storage capacity could be reduced from 5m b / d to less than 3m b / d by the second half of the year, and much of what is happening in Saudi Arabia and the UAE.

Goldman Sachs predicts a recurrence, predicting Opec + storage capacity will reach “record low this summer” at around 1.2mb / d.

The increase is alarming because oil prices around the world have been steadily declining since the US, Europe and Japan pulled more stocks out of their stock. In all OECD countries, prices have been the lowest since 2000, according to Goldman Sachs.

“It is reasonable to assume that there could be a 1m b / d disruption,” said Damien Courvalin, chief research officer at US Investment Bank. “That is half your respite then you are left with zero.”

Some researchers are not concerned. “It’s a complex concept of potential [but] “We don’t think there will be any problems,” said Paul Horsnell, a Standard Chartered marketing specialist, adding that he believes there is enough space in Saudi Arabia, Iraq and the UAE to deal with more incidents this year.

Standard Chartered predicts a decline in inflation, driven by rising demand and insufficient production growth – particularly outside of Opec – but until 2024. It predicts Brent’s median prices of $ 75 barrels in 2022 and $ 77 in 2023.

Sen at Energy Aspects also expects a reduction in supplies by 2024 but believes it has begun. “We have been talking about the decline from 2022 to 2025 for some time,” he said. “It’s because of the lack of savings and the lack of capital that has grown so much with Covid because of the need to recover quickly in some ways.”

On the other hand, current inflation would have created a financial gap that would make the market more attractive. But pressure to reduce dependence on oil and gas reduces such damage, especially on public supermajors.

“Even at these prices, which brings huge profits, [companies] puts the right priority [environmental, social and governance]”said Sen.” If money does not rise now it will not. “