Oil Price Increases By 3% Amid Tighter Crude Supplies

Nigeria's Oil Output Dropped To 1.346m Barrels Per Day - OPEC

Oil prices witnessed a 3 per cent increase on Tuesday on goals of tighter crude supplies.

Experts believe that the rise may be related to expectations that the spread of the Omicron variant will not derail a global demand recovery.

Consequently, the price of the Brent crude rose by $2.76 or 3.41 per cent to close at $83.63 per barrel, while the US West Texas Intermediate (WTI) crude rose by $3.10 or 3.96 per cent to trade at $81.33 per barrel.

In the same vein, poor maintenance at export facilities drove the North African producer to shut in exports from the terminal, compounding weather-related woes which have made it hard for tankers to connect to loading facilities at the terminal.

The announcement of new disruptions at Es Sider comes promptly after the El Feel field returned to production. The Petroleum Facilities Guard (PFG) had halted pipeline flows from the field in December 2021.

This means that it won’t be able to add to supply additions by the Organisation of the Petroleum Exporting Countries (OPEC) which are running below the increase permitted under a pact with its allies.

OPEC and its allies, OPEC+’s inability to ramp up production as quickly as it has agreed to is also lending support to crude oil prices.

While the larger 23-man OPEC+ group has agreed to increase output at 400,000 barrels per day, it has been unable to achieve this volume in any month.

Market analysts expect that US inventories data to show crude stockpiles fell by about 2 million barrels.

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