For the First time in 7 Years, Brent Prices Surged Past $90 Per Barrel

For the first time in seven years, Brent prices surged past $90 per barrel this week, buoyed by a series of bullish factors.

For the first time in seven years, Brent prices surged past $90 per barrel this week, buoyed by a series of bullish factors. First, low inventories remain the number one reason underlying investment banks’ $100 per barrel short-term forecasts. The fact that US commercial stocks just fell for the third time in a row has not helped that. Second, with much of Europe captivated by the prolonged Russia-Ukraine standoff, speculation that Russian oil might be embargoed from the market added another geopolitical premium to prices. Simultaneously, supply scarcity remains a global worry as corroborated by steep backwardation – the Brent six-month market structure was almost at $7 per barrel this week – with very little indication that OPEC+ would be willing to churn out more than it is supposed to under the terms of its agreement. Things are looking very bullish for oil markets indeed.