Oil Prices Rise to $89 per barrel as Geographical and Supply Pressure Heightens

On Wednesday 26 January 2022, Oil prices rose to almost $90 per barrel as supply and geographical pressure ravages Europe and Middle East.

Data monitored on ratecaptain.com suggests that Brent crude increased by 1.6% to $89.57 as at 13:19 GMT and U.S. West Texas Intermediate (WTI) crude rose by 1.3% to $86.73.

Ricardo Evangelista, Senior Analyst at ActivTrades stated that, “The barrel price action is being determined by growing apprehension that ongoing supply issues may worsen due to the escalating tension between Russia and the West over Ukraine and the threat of military attacks on infrastructure in the Middle East,”

Concurrently, Moscow has warned the United Stated and its allies of retaliatory measures if Russia’s security demand and policy measures are not accepted. However, Russia has revealed that they do not intend to invade Ukraine despite 100,000 troops deployed at the border of Ukraine. Although the United States and its allies have threated sanctions towards Russia, no signs of progress has been made.

On the supply and demand side of the market, U.S. inventory weekly report reveals crude stocks fell by 872,000 barrels.

As the Feds are expected to raise interest rates to combat inflation, investors have reduced market trade and activities as they await the decision from the U.S. Federal Reserve.

The Organization of the Petroleum Exporting Countries and allies, known as OPEC+, are set for a February 2 meeting centered around output increase.

Meanwhile In the Nigerian oil market, Bonny Light declined by 2.71% to close at $86.62 a barrel while , Brass RIver and Qua Iboe closed at $87.63 per barrel, representing a 1.74% decline. Nigeria’s external reserve dropped by 0.19% on Monday, 24th January 2022 closing at $40.24 billion, representing a decline of $74.66 million as against $40.31 billion recorded as of the previous trading day.