Oil prices extended their bullish rally on Friday, surpassing the $90 per barrel mark during the early London session. This marks the first time since October 2014 that both Brent crude and West Texas Intermediate (WTI) are trading above the $90 range.
As of report time, Brent crude was up 0.26% at $91.35, while WTI rose 0.45% to $90.69 per barrel. The sharp gains are fueled by a massive winter storm across central and northeastern U.S., threatening oil production and logistics.
Weather, Supply Tightness, and Geopolitics Driving the Rally
The ongoing winter blast has caused travel disruptions, power outages, and temporary halts in oil output, especially in Texas’ Permian Basin. Meanwhile, supply remains tight, pushing WTI’s six-month backwardation to $8.08 per barrel, close to an eight-year high.
Adding to the price pressure are rising geopolitical tensions in Eastern Europe and the Middle East, with concerns over a potential Russian invasion of Ukraine. The Brent benchmark is up 17% and WTI by 20% year-to-date.
Expert Reactions and Future Outlook
Edward Moya of OANDA said the market is more concerned with production disruptions than demand drops. Similarly, Chiyoki Chen of Sunward Trading expects prices to approach $100 per barrel due to OPEC+’s slow production ramp-up.
However, Citi Research predicts a shift to global inventory builds by Q2 2022, which could ease the price surge.
Nigeria’s Production Woes Add to Global Concern
Domestically, Nigeria’s oil supply suffered a setback following a fire outbreak on the FPSO Trinity Spirit at the Ukpokiti Terminal. Though no fatalities were reported, the incident puts more strain on the country’s already struggling output.
