On Tuesday, oil prices once again gained their momentum as worries mount over the strict inventories underpinned prices. However, fears limited optimism due to the rebound of COVID-19 cases in European nations.
Brent futures inched up to USD 82.66 per barrel by 0.74 per cent or 61 cents at 0421 GMT. The WTI (US West Texas Intermediate) crude surged to USD 81.42 per cent a barrel or 0.67 per cent or 54 cents.
Mitsubishi Corp, senior risk manager, Tokyo, Tony Nunan said that oil prices and supply will grow. However, that might take around six months. Moreover, inventories had come down too low. There was no safety margin.
He added that low inventory levels oil prices could push up following a very cold winter and sluggish attitude of OPEC to increase supplies.
Meanwhile, Russian crude grades that are sold in Asia got the highest spot premiums in the past 22 months during January. That extended profits for a fourth straight month.
However, worries regarding demand destruction following the Coronavirus pandemic weighed.
In the past few days, Europe is quickly becoming the epicentre COVID-19. Thus, some nations are considering re-imposing lockdowns to curb the spread of the fatal virus. On the other side, China is putting the best foot forward to battle the spread of the Delta variant in its regions.
Interestingly, OPEC had cut the world oil demand forecast the previous week for the 4th quarter by 330,000 BPD (barrels per day) compared to the last month’s forecast. It happened because the rising energy prices impeded economic recovery.
The fears of demand declining and supplies increasing are also triggering issues.
It is noticeable that the previous week, the US energy firms amalgamated natural gas and oil rigs for a third week in a row. It has been pushed by a 65 per cent rise in oil prices.