Kyiv.Ukraine.Ukraine Gate – November 16,2021- Oil prices rose on Tuesday, November 16 on fears of a stock shortage, but investor optimism was limited by doubts about continued demand amid rising cases of the novel coronavirus.
The price of a barrel of January Brent oil at 9:15 Kiev time was $82.98 (+12%). A barrel of WTI crude oil for the month of December was trading at $80.56 (+1.02%). The initial trading in the benchmarks ended at $82.05 and $79.75, respectively.
“At such oil prices, supply will increase, but this process may take six months, and commodity stocks have fallen sharply. We do not have a margin of safety. We have very low inventories, and if the winter is very cold and OPEC does not increase supplies, it could lead to higher oil prices, ”said Tony Noonan, senior risk manager at Mitsubishi Corp. from Tokyo.
Concerns about falling demand over the COVID-19 pandemic were strong. Europe has once again become the epicenter of the COVID-19 pandemic, prompting some governments to reconsider quarantine. At the same time, China is struggling with the largest coronavirus outbreak caused by the Delta strain.
Concerns about declining demand also appear in connection with the expected increase in supply. Last week, US energy companies put into operation new oil and gas drilling rigs, resulting in a 65% increase in US oil prices this year.
Shale oil production in the United States in December is expected to rise to pre-pandemic levels of 8.68 million bpd. This is evidenced by data from Rystad Energy.
