Crude oil retreats from 7-year-highs

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Crude oil retreats from 7-year-highs

Oil prices
Image source: © Batareykin | Megapixl.com

Highlights

  • Crude oil prices inched lower on Thursday.
  • This week, supply concerns arose following a fire incident on Turkey's Kirkuk-Ceyhan pipeline.
  • The overall supply disruptions in the industry are coming as OPEC+ members cannot fulfil their monthly production target.

Crude oil prices inched lower on Thursday after reaching seven-year highs a day earlier on concerns related to tight supplies.

The price started galloping on Monday following an incident where the Houthi group of Yemen attacked one oil facility in the United Arab Emirates by launching a drone and missile.

March delivery Brent Crude oil futures last traded at US$83.11 per barrel down 2.85%, whereas March delivery WTI crude oil futures traded 1.55% down at US$85.99 per barrel as of 21 January 2022 at 12:17 PM AEDT.

Rising US stocks

As per the US Energy Department, crude oil stocks rose by 515,000 barrels in the last week. At the same time, gasoline inventories jumped 5.9 million barrels, the highest in a year.

Supply concerns rose this week following a fire incident on Turkey's Kirkuk-Ceyhan pipeline that carries crude from northern Iraq to the Turkish port of Ceyhan due to a power pylon.

Falling Oil prices

Source: © Designer491 | Megapixl.com

On Monday, Yemen’s Houthi group attacked the United Arab Emirates by exploding a fuel truck and killing three people. Furthermore, Houthi’s also warned they could target more facilities.

While the demand for oil remains steady, the US product supplies reached 21.2 million bpd over the past four weeks.

The overall supply disruptions in the industry are coming as OPEC+ members cannot fulfil their monthly production target of 400,000bpd.

Bottom Line

Crude oil prices inched lower on Thursday after reaching multi-year highs on Wednesday due to concerns related to tight supply as OPEC+ members cannot fulfil their monthly production target.

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