Oil Market Keeps Getting Stronger as Prices Blow Through $92 - Bloomberg

Oil Market Keeps Getting Stronger as Prices Blow Through $92 - Bloomberg

“The rally in crude prices is showing no signs of slowing down as both supply and demand drivers remain very bullish,” said Ed Moya, Oanda’s senior market analyst for the Americas. “Geopolitical risks that include Russia-Ukraine tensions and Iran nuclear talks are also wildcards for oil prices as they seem more likely to lead to a tighter market over the short-term.

All of that is coming as OPEC+ struggles to lift output by the 400,000 barrels a day it has pledged each month. In January, OPEC’s 13 members added just 50,000 barrels a day, fanning trader concerns that the market’s spare capacity buffer is dwindling.

The rally means a return of $100 oil is growing increasingly likely by the day. For months, options markets have been abuzz with trading of contracts above that level. There are the equivalent of almost 112 million barrels of $100 calls for the global Brent benchmark over the next 12 months. Call options sold by banks in the $90s are also likely contributing to oil’s move higher.

On Friday, headline prices rose again with West Texas Intermediate settling at $92.31, and posting its seventh straight weekly gain, rising 6.3%. The global benchmark settled up 2.4% at $93.27 in New York.