International Energy Forum predicts oil prices above $100/b Oil prices have been rising steadily for several weeks.
The price of Brent crude oil moved around $96/b last week, up significantly by 2.8% (WTI at $89/b; + 1.4%). This upward movement, which continues a trend observed since the beginning of October ($90/b), accelerated last Friday with a price close to $100/b ($99.6/b).The recent uptrend has been driven by an expected change in Chinese policy on Covid, the falling dollar and uncertainty about the effects of European and G7 sanctions against Russia. This upward movement could still be moderated by the economic and financial context. Financial market developments have been relatively bumpy over the past week (Fig. 2), momentarily moving into negative territory due to the FED's comments advocating both firmness to fight inflation but also flexibility on future rate adjustment policy (new 0.75 point increase in the main interest rate decided on 2 November).The market prices of petrol and diesel remain under pressure, even if the price of diesel has fallen back compared to the surges of October. The spread with the Brent price was on average at the beginning of November at +297 $/t (291 $/t in October) for petrol and +340 $/t (520 $/t in October) for diesel (Fig. 9). The IEA, in its annual report, does not anticipate any improvement in the coming months, stressing that "the global refining system is likely to remain tight for several years if demand for middle distillates (diesel and paraffin) continues to grow at the current rapid pace".
Online crude oil price: Brent and WTI market
The G7 is calling for an increase in production, a call that has so far gone unheeded.
With the prospect of a precarious market balance in the coming months (Fig. A4 in annex), the G7 "encouraged" the producer countries to increase their production, a subject taken up in the final communiqué of 4 November. At a conference in Abu Dhabi on 31 October, Saudi Arabia and the United Arab Emirates defended the recent decision by OPEC and its allies, including Russia, to cut oil production in the face of economic uncertainty. In addition to the geopolitical context, the link regularly made between the ecological transition and the cessation of investment in exploration and production is probably an important factor at the origin of this latent rupture between consumer and producer countries.
View our full Crude Oil Market Report - Week of 11/10/2022 - due out this 17/10/2022.