London, (Business News Report)|| Benchmark Brent crude reached the level of $91 a barrel in light of persistent supply concerns and cold weather.
Brent crude rose $1.64, or 1.8%.
US light crude also crossed $90 a barrel for the first time since 2014.
West Texas Intermediate crude rose $2.01, or 2.3%, to settle at $90.27 a barrel. This is the first time for the crude to close above $90 since October 6, 2014.
Analysts attributed the rise in oil prices to three reasons. They are the increasing fears that cold weather will affect production in Texas, the exacerbation of the scarcity of supply in global oil markets, and the Coronavirus repercussions.
The global supply scarcity and global political tension have increased oil prices by about 15% since the beginning of the year. Demand continues to rise, as the mutated Omicron strain of the Coronavirus temporarily reduces consumption in major economies.
In a related context, the OPEC+ agreed on Wednesday to stick to the monthly increases of 400,000 barrels per day in oil production, despite pressure from major consumers to increase production more quickly.
The members of the OPEC+ alliance agreed to continue the production policy during the month of March at 400,000 barrels per day per month.
According to Reuters news agency, the OPEC+ alliance agreed to hold the next meeting on March 2 to discuss the situation of the global oil market.
The decision of the OPEC+ also comes in line with sources’ expectations that the Omicron variant of the Coronavirus, will not affect global oil demand severely.
OPEC members did not take decisions to increase production significantly. But they rather maintained their policy of rationing the increase.
The group expects that global demand for oil will grow by 4.2 million barrels per day this year. The International Energy Agency estimates demand growth in 2022 at 3.3 million barrels per day and total consumption at about 100 million per day.
Goldman Sachs expected the OPEC+ countries to increase oil production, in light of the significant increase in oil prices.
