The world’s biggest independent oil trader said crude prices, already up more than 10% this year, could rise even more because of tight supplies.
“These prices are justified,” Mike Muller, head of Asia for Vitol Group, said Sunday. “Strong backwardation is very much justified,” he said, referring to a bullish pattern whereby near-term futures are more expensive than later ones.
Oil posted a fourth-straight gain last week, its longest rising streak since October, amid signs consumption will hold up despite the spread of the omicron variant of the coronavirus. At the same time, spare capacity is dwindling as some of the world’s biggest producers struggle to boost output.
Brent crude has jumped 11% this year to over $86 a barrel, extending last year’s gain of 50%.
Muller said that while natural gas prices have climbed enough to cause some industrial users -- including in Pakistan and Europe -- to cut back on consumption, the oil market hadn’t reached that point.
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