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Oil to reach $100 a barrel later this year

Oil to reach $100 a barrel later this year

 

U.S. crude exports are ramping up due to increasing demand from Asia and Europe and recovering U.S. production from the lows of the coronavirus pandemic.

Surging worldwide demand, supply outages and international political tension have stoked worries around crude supplies, boosting oil prices to the highest levels in seven years, with some predicting crude could even reach $100 per barrel. That has brought in more buyers of U.S. oil, increasing exports and decreasing domestic crude stockpiles.

U.S. seaborne crude exports have increased in recent weeks and are close to 3 million barrels per day so far this month, according to Matt Smith, lead oil analyst for the Americas at Kpler. That's just under the 3.2 million bpd average in crude exports in December, which was the strongest month since February 2020, he said.

Cargoes booked for February are headed to numerous countries including China, South Korea and India, Refinitiv Eikon shipping data showed. Those three are among the largest regular buyers of U.S. crude. Global demand in Asia in 2022 is expected to rise 4% to 37.2 million bpd, the International Energy Agency said Thursday, making it the only major region ahead of 2019's pace.

Exports have helped reduce crude stockpiles in the U.S. Gulf Coast to as low as 220.3 million barrels earlier this month, which was a two-year low.

Increased vehicle traffic means lighter barrels from the United States, which produce a higher volume of gasoline, are attractive to buyers. The IEA said Thursday it expects worldwide gasoline demand to rebound to 26.3 million bpd - just 1% lower than 2019's consumption.

Read the latest issue of the OGV Energy magazine HERE

Published: 21-01-2022

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