Will oil break through $90 as global energy scarcity continues?

Brent crude prices settled above $83 a barrel on Tuesday, amid expectations that the energy crisis from Asia to Europe will increase demand and shrink global balances.

US West Texas Intermediate crude futures fell somewhat in Asian trading, to $ 80, after closing 1.5 percent higher on Monday.

Oil markets are tightening rapidly in the run-up to the Northern Hemisphere winter, as shortages of natural gas and coal drive demand for alternative power generation fuels such as diesel and fuel oil. The OPEC + alliance’s caution in restoring supply adds pressure on prices.

Citigroup raised its fourth-quarter forecast for Brent prices to $85 a barrel, and the group said it could rise to $90, due to factors including the replacement of gas this winter. OPEC+ will likely struggle to meet demand growth for the rest of the year, according to Bloomberg, citing Vivek Dar, an analyst at the Commonwealth Bank of Australia.

Wayne Gordon, strategist at UBS AG Wealth Management, said: “If oil prices continue to head towards $90 a barrel, there is a possibility that OPEC will start to raise the pumping level a bit and try to calm the market.”

Source: Arabic


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