Fundamental analysis
31 January, 2022
Oil rose more than 1% on Monday to near 7-year highs hit in the previous session, while supply concerns and political tensions in Eastern Europe and the Middle East put prices on track for their biggest monthly gain in almost a year. The benchmarks recorded their highest levels since October 2014 on Friday, $91.70 and $88.84, respectively, and their sixth straight weekly gain. They were headed for about 17% gains this month, the most since February 2021. At its Feb. 2 meeting, OPEC+ is likely to stick with a planned rise in its oil output target for March, several OPEC+ sources told Reuters. Tensions between Russia and the West have also underpinned crude prices. Russia, the world’s second-largest oil producer, and the West have been at loggerheads over Ukraine, fanning fears that energy supplies to Europe could be disrupted. The head of NATO said on Sunday that Europe needs to diversify its energy supplies as Britain warned it was “highly likely” that Russia was looking to invade Ukraine. The market is on alert over the Middle East situation too after the United Arab Emirates said it had intercepted a ballistic missile fired by Yemen’s Houthi as the Gulf state hosted Israel’s President Isaac Herzogin first such visit.
