TUE. 20 DEC, 2022-theGBJournal| Last week, the price of Brent recovered, hitting as high as US$82.70/bbl before settling at US$79.04/bbl, up 3.86%, the biggest weekly gain since 7 October.
Brent is up 1.62% year-to-date and has traded at an average of US$99.69/bbl, 40.62% higher than the average of US$70.89/bbl in 2021.
Oil prices rebounded, following positive economic data in the US as the consumer price index for November increased by a better-than-expected 7.1% year-on-year.
Meanwhile, the 622kbpd Keystone pipeline running from Alberta, Canada into the US Midwest is being halted for almost a week after a 14,000-barrel oil spill in Kansas, pointing to a temporary supply shortage.
Analysts maintain that prices are likely to remain well above the US$73.00/bbl set in Nigeria’s government budget for several months to come.
Meanwhile, OPEC in its recently published oil market report for December, said the world oil demand forecast for 2022 remains unchanged at 2.5 mb/d.
The oil demand was adjusted higher in the 3Q22, amid better-than-anticipated transportation fuel consumption in OECD, offset by a downwardly revised estimate for 4Q22 due to a slowdown in the non-OECD amid reduced mobility and sluggish industrial activity in China.
For 2023, world oil demand growth also remains unchanged at 2.2 mb/d, with the OECD growing by 0.3 mb/d and non-OECD growth forecast at 1.9 mb/d. This forecast is subject to many uncertainties including global economic developments, COVID-19 containment measures mainly in China and ongoing geopolitical tensions.
In the report OPEC calculated its Reference Basket (ORB) averaged at $89.73/b in November, falling m-o-m by $3.89, or 4.2%.
The ICE Brent front-month fell $2.74, or 2.9%, to average $90.85/b, and NYMEX WTI decreased by $2.64, or 3.0%, to average $84.39/b. The Brent/WTI futures spread narrowed further m-o-m, contracting by 10¢ to average $6.46/b.
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