Oil gets near $82 per barrel as demand recovers and supply tightens

oil prices 2

Oil prices got near $82 per barrel this Tuesday, supported by tight supplies and stronger demand, as coronavirus cases soar, but not mobility restrictions and lockdowns. Indeed, governments around the world have avoided severe lockdowns as the Omicron variant poses less risk.

Firstly, Brent gained 73 cents, or 0,9% to $81,60 per barrel this Tuesday morning; having lost 1% in the previous session. While the US mix, the West Texas Intermediate rose 77 cents, or 1%, to $79 per barrel; after falling 0,8% on Monday, according to Reuters.

Moreover, on the supply side, a lack of capacity in some countries of the Organization of Petroleum Exporting Countries (OPEC) has meant that supply additions are running below the increase under the pact from last year.

On the other hand, as major economies have avoided lockdowns, demand keeps peaking. Consequently, economic recovery might keep track throughout the year. Jeffrey Halley, an analyst at brokerage OANDA, said about the matter. “Omicron has yet to wreak the havoc of the Delta variant and may never do so, keeping the global recovery on track.”

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Oil prices might show further increases

In addition, recent outages in Libya have also supported prices and the National Oil Corp on Tuesday said it was suspending exports from the Es Sider terminal. Commerzbank analyst Carsten Fritsch, said. “Higher oil production in the country has not yet translated directly into an increase in available oil supply.”

He also remarked. “This may explain why oil prices have not responded as yet to the reopening of Libyan oilfields.”

Finally, a weaker dollar has also helped the increase of oil, as it makes it cheaper for buyers holding other currencies and tends to reflect a higher risk appetite among investors. In fact, in what would be a further indication of tight supply, the latest reports on US inventories might show crude stockpiles fell by about 2 million barrels.

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