Stocks of oil in some of the world’s top economies have fallen to their lowest levels in almost a decade and a drive to refill them could nudge oil toward $100 a barrel.
Oil has rallied from a pandemic low of around $16 to nearly $92 on Friday as the global economy recovers from the pandemic and the Omicron variant of the coronavirus has little impact. However, just when buyers will buck high prices to refill depleted storage is disputed by banks and analysts.
Brent crude for April delivery was up 14 cents, or 0.2 percent at $89.40 a barrel.
The front-month contract for March delivery expired on Monday at $91.21 a barrel, up 1.3 percent.
US West Texas Intermediate crude rose 13 cents, or 0.2 percent, to $88.28 a barrel, having gained 1.5 percent in the previous day.
The benchmarks hit their highest levels since October 2014 on Friday, at $91.70 and $88.84, respectively. They have gained about 17 percent in January, the biggest monthly gain since February 2021, amid a supply shortage and geopolitical tensions in Eastern Europe and the Middle East.
Market analysts and Reuters sources widely expect OPEC+, which groups the Organization of the Petroleum Exporting Countries and allies led by Russia, to keep to its policy of gradual production increases when it meets on Wednesday.
OPEC’s oil output in January has again undershot the rise planned under a deal with allies, a Reuters survey found on Monday, highlighting some producers’ struggle to pump more even as prices are high.
Even top energy watchdog the International Energy Agency (IEA) says the ups and downs of the pandemic are clouding the ability to model a trend.
Global jitters over a possible Russian invasion of Ukraine and a slew of supply shocks have addled the market and keep pushing oil up, exacerbating inflation and threatening the world’s economic recovery.
“Tank bottoms are in sight across crude and products worldwide already,” research consultancy Energy Aspects said.
Storage tanks are extremely low and major producers in the OPEC+ alliance are struggling to pump enough to meet pledged production targets, it added.
“There is a growing acceptance that the oil market has few, if any, shock absorbers left.”
Storage levels in OECD countries plumbed seven-year lows in November and were on track to fall more in December, according to the IEA.
Europe and especially the Asia-Pacific countries, led by Japan and South Korea, were the most depleted of the prosperous bloc of countries.
