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Global oil benchmark tops $90 for the first time since 2014

KEY POINTS
  • Brent crude futures, the international oil benchmark, topped $90 on Wednesday for the first time in eight years.
  • The threshold breakthrough comes amid growing geopolitical tensions between Russia and Ukraine, and as supply remains tight amid a rebound in demand.Read More..
  • CIBC Private Wealth’s Rebecca Babin said potential sanctions on Russia, which would be triggered by a Ukraine invasion, would be a catalyst for higher crude prices.
  • he international oil benchmark, topped $90 on Wednesday for the first time since 2014, adding to oil’s blistering recovery since its pandemic-era lows in April 2020.
  • Goldman Sachs said Wednesday the firm’s base case is that supply disruptions are unlikely to occur, but that there could be upside for energy prices given an already tight market.,
  • OPEC and its oil-producing allies have been returning crude to the market, but the group’s been unable to ramp up production to hit its targets. Meanwhile, U.S. shale oil growth has slowed, and omicron hasn’t been the demand hit that was initially expected. Additionally, inventory levels remain depleted.
  • Immediately it becomes a question how long we’ll be waiting for triple figures,” said Oanda’s Craig Erlam. “It’s still unlikely that oil and gas will be used as a weapon anytime soon but if it was, it could lead to a serious surge in prices given how tight the markets are.

Thanks : Ali Muhammad Lakdawala

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