Fundamental analysis
24 January, 2022
Oil prices rose on Monday on worries about supply disruption amid rising tensions in Eastern Europe and the Middle East, which could make an already tight market even tighter, while OPEC and its allies continued to struggle to raise output. Both benchmarks rose for a fifth week in a row last week, gaining around 2% to hit their highest since October 2014. Prices are already up more than 10% this year on the concerns over tightening supplies. fuelling fears of supply disruption in Eastern Europe, the United States on Sunday ordered the departure of family members of staff at its embassy in Ukraine, citing the continuing threat of military action from Russia. The New York Times reported late Sunday that U.S. President Joe Biden was considering deploying several thousand U.S. troops to NATO allies in Eastern Europe and the Baltics. Russia will face severe economic sanctions if it installs a puppet regime in Ukraine, a senior British government minister said on Sunday, after Britain accused the Kremlin of seeking to place a pro-Russian leader in power there. In the Middle East, the United Arab Emirates' defence ministry said it destroyed two Houthi ballistic missiles targeting the Gulf country on Monday, with no casualties, the state news agency (WAM) reported. Money managers raised their net long U.S. crude futures and options positions in the week to Jan. 18, the U.S. Commodity Futures Trading Commission (CFTC) said on Friday. In the United States, petroleum inventories have continued to slide over the last month, while energy firms cut oil rigs this week for the first time in 13 weeks. Analysts expect cold weather to boost heating demand over the next few weeks.
