• Sign up for the Daily Digest E-mail
  • Facebook
  • X
  • LinkedIn

BOE Report

Sign up
  • Home
  • StackDX Intel
  • Headlines
    • Latest Headlines
    • Featured Companies
    • Columns
    • Discussions
  • Well Activity
    • Well Licences
    • Well Activity Map
  • Property Listings
  • Land Sales
  • M&A Activity
    • M&A Database
    • AER Transfers
  • Markets
  • Rig Counts/Data
    • CAOEC Rig Count
    • Baker Hughes Rig Count
    • USA Rig Count
    • Data
      • Canada Oil Market Data
      • Canada NG Market Data
      • USA Market Data
      • Data Downloads
  • Jobs

Oil down on lower supply and post-pandemic recovery

February 1, 20227:40 AM Reuters0 Comments

A pumpjack seen in winter during sunset.

Oil prices were down slightly on Tuesday, while still hovering near seven-year highs hit last week, on expectations that a limited production increase by major oil producers and a solid post-pandemic recovery in fuel demand will keep a tight supply condition.

U.S. West Texas Intermediate crude dropped 68 cents, or 0.77%, to $87.47 a barrel, having gained 1.5% in the previous day. 

CL1! chart by TradingView
Brent crude for April delivery was down 56 cents, or 0.63% at $88.65 a barrel.

The front-month contract for March delivery expired on Monday at $91.21 a barrel, up 1.3%.

The benchmarks hit their highest levels since October 2014 on Friday, at $91.70 and $88.84, respectively. They have gained about 17% in January, the biggest monthly gain since February 2021, amid a supply shortage and geopolitical tensions in Eastern Europe and the Middle East.

“The market is maintaining a bullish tone on expectations that supply tightness will continue as demand is picking up, with receding fears over spreading Omicron coronavirus variant,” said Hiroyuki Kikukawa, general manager of research at Nissan Securities.

“All eyes are on OPEC+ decision as well as development of the conflict between Russia and the West over Ukraine,” he said.

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.

“We expect little surprise from the OPEC+ meeting, though there is a small chance that Saudi will voluntarily increase output outside the OPEC framework to avoid the fall in demand caused by higher prices,” said Naohiro Niimura, a partner at Market Risk Advisory, a research and consulting firm.

“If no surprise, Brent is expected to stay between $85 and $95 for a while due to concerns over supply shortage amid rising geopolitical tensions,” he said.

Tensions between Russia and the West have underpinned crude prices. Russia, the world’s second-largest oil producer, and the West have been at loggerheads over Ukraine, fanning fears that energy supplies to Europe could be disrupted.

The United States and Britain are prepared to punish Russian elites close to President Vladimir Putin with asset freezes and travel bans if Russia enters Ukraine, Washington and London said on Monday as tensions also spilled over at the United Nations.

The risk of geopolitical disruptions to oil supply at a time of already tight inventories due to the strong post-pandemic recovery has sent the premium commanded by barrels for prompt delivery soaring, suggesting the current price rally has further to run.

Follow BOE Report
  • Facebook
  • X
  • LinkedIn

Sign up for the BOE Report Daily Digest E-mail

Successfully subscribed

Latest Headlines
  • Discount on Western Canada Select widest since March
  • Blackstone to Invest More Than $25 Billion in Pennsylvania’s Digital and Energy Infrastructure, Plus Catalyze an Additional $60 Billion Investment
  • Venture Global proposes larger expansion at Plaquemines LNG facility, filing shows
  • Ex-Pioneer CEO cannot challenge order barring him from Exxon board, FTC says
  • SLB’s ChampionX deal clears final hurdle with UK approval

Return to Home
Alberta GasMonthly Avg.
CAD/GJ
Market Data by TradingView

    Report Error







    Note: The page you are currently on will be sent with your report. If this report is about a different page, please specify.

    About
    • About BOEReport.com
    • In the News
    • Terms of Use
    • Privacy Policy
    • Editorial Policy
    Resources
    • Widgets
    • Notifications
    • Daily Digest E-mail
    Get In Touch
    • Advertise
    • Post a Job
    • Contact
    • Report Error
    BOE Network
    © 2025 Stack Technologies Ltd.