Crude oil futures began the week stable to higher in Asia’s mid-morning session on Feb. 7, building on the bullish momentum of the previous seven weeks as supply concerns remained prominent. The ICE April Brent futures contract was up 23 cents/b (0.21 percent) at $93.52/b at 10:20 a.m. Singapore time (0216 GMT), while the NYMEX March light sweet contract was down 14 cents/b (0.15 percent) at $92.18/b.
Crude prices remained on track to reclaim $100 per barrel, a level last reached by ICE Brent on Sept. 9, 2014. The latest disturbance to oil markets was a deep frost that extended over the United States late in the week ending February 4. Crude oil prices continued to rise as increased consumption boosted sentiment amid persisting supply constraints. As constraints from the recent COVID-19 increase are eased, demand for transportation fuels continues to rise.
Diesel demand in the United States has reached its greatest level for this time of year in at least three decades, while supplies on the east coast have dropped to their lowest level since April 2020. “Crude prices seem to have a one-way ticket to $100/b oil,” OANDA’s senior market analyst Edward Moya wrote in a report late last week. Crude prices have climbed for seven weeks in a row, gaining 30 percent in value over that time.
Market participants are looking to Iranian oil and the reintroduction of sanctions waivers as a possible solution to the present supply shortage. Despite the recent US move to grant some sanctions relief to Tehran’s civil nuclear programme, analysts said a US-Iran deal for resuming nuclear controls and lifting major oil sanctions remained far from certain.