Naveen Thakral

SINGAPORE (Reuters – Oil prices rose on Monday, as market participants began 2022 with a positive outlook. But concerns over waning demand due to the rapidly spreading COVID-19 pandemic limited gains.

The price of a barrel at $78.45 per barrel increased by 67cs (or 0.86%) as of 0102 GMT. U.S. West Texas Intermediate crude oil futures rose 77c, or 1.02% to $75.98 per barrel.

The global economic recovery after the COVID-19 pandemic slump, producer restraint and the worldwide rise in oil prices last year fueled a 50% increase in oil prices.

U.S. doctors warned Americans that severe disruptions could occur in the coming weeks. The increased number of holiday travelers, New Year festivities, and school reopenings due to winter holidays will increase infection rates.

According to a Reuters poll, oil analysts are now lowering their prices forecasts for 2022 because the Omicron coronavirus variant is a headwind for recovering fuel demand. Also, there’s a risk of a glut in supply as more oil producers pump more.

According to a survey, 35 analysts and economists predicted that Brent crude oil would be at $73.57 per barrel by 2022. This is 2% less than the $75.33 consensus of November. This is the first price drop in 2022 since August’s poll.

In 2022, the average barrel price is expected to be $71.38. This compares with $73.31 in consensus.

U.S. Energy firms increased oil production for 17 consecutive months. Higher prices attracted some drilling crews back to the pad after last year’s drop in demand caused by coronavirus.

The U.S. oil production rose by 6.6% to 11.47M barrels per day in Oct, due to an increased output in the Gulf of Mexico after hurricanes. According to Thursday’s Energy Information Administration monthly report.

Russia, the Organization of the Petroleum Exporting Countries (or OPEC+) will most likely continue to increase their supply by 400,000 barrels daily in February. This is according to four sources.

In 2021 commodity prices rose sharply from agricultural commodities and energy to metals and agriculture products. Power fuels led the rally driven by tight supplies, strong economic recovery, and widespread lockdowns being avoided with COVID-19 vaccines.