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Oil Prices Retreat From 7-Year Highs.

London, Thursday, 20 January 2022

On Thursday, global oil prices retreated from record highs reached on Wednesday, which had not been seen since 2014.

Short-term global supply interruptions boosted international benchmark Brent crude to an all-time high of $89.17 on Wednesday.

Brent was trading at $88.30 per barrel at 0557 GMT on Thursday, down 0.15 percent from the previous session's close of $88.44 per barrel.

At the same time, the American benchmark West Texas Intermediate (WTI) was trading at $85.92 a barrel, down 1.19 percent from the previous session's close of $86.96 per barrel.

Short-term supply interruptions were overcome, which included the reopening of the 1,876-kilometer-long major pipeline that transports crude oil from northern Iraq to Turkey's southern port of Ceyhan for export.

An explosion late on Tuesday put the pipeline offline for "unknown" reasons. The pipeline was reopened on Wednesday after "all essential steps" were taken and the fire was put out, according to Turkey's state pipeline operator BOTAS.

Further threats to oil supply came from Yemen's Houthi group, which targeted oil facilities in the United Arab Emirates (UAE) earlier this week, threatening the region's oil supply.

Another threat to supply chains emerged when Russia, Ukraine, and NATO increased military drills in response to rising tensions in recent weeks, with Kyiv publicly accusing Moscow of planning an invasion.

Meanwhile, OPEC producers are struggling to achieve their monthly quotas under the OPEC+ agreement with Russia and its allies to add 400,000 barrels per day.

The increasing number of daily omicron instances in key economies is restraining upward price movements by boosting the possibility of tougher controls being implemented.

(Written and edited by: The Decision Maker)


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