U.S. oil crossed above $90 on Thursday for the first time since 2014 as demand for petroleum products surges while supply remains constrained.
West Texas Intermediate crude futures, the U.S. oil benchmark, gained more than 2% to trade as high as $90.23 per barrel. The last time prices were above the $90 mark was October 2014. International benchmark Brent crude rose 1.7% to trade at $91. Brent topped $90 on Jan. 26.
Oil’s had a blistering rally since falling to record lows in April 2020 — WTI briefly traded in negative territory — as demand has returned but producers have kept supply in check.
WTI is up nearly 20% for the year, building on 2021’s more than 50% gain. As oil prices push higher, a number of Wall Street analysts have forecasted $100 oil.
Oanda’s Ed Moya added that part of Thursday’s push higher is due to cold temperatures and a potential drop in production.
“The oil market is so tight that any shock to production is going to send prices soaring. OPEC+ production is on cruise control with their gradual increase strategy, which means oil seems like it’s going to make a run towards $100 oil pretty soon,” he said.
On Wednesday OPEC and its oil-producing allies, a group known as OPEC+, decided to stick to a previously announced schedule and increase March production by 400,000 barrels per day. The move comes as the group has faced pressure, including from the U.S., to boost output in an effort to alleviate the rapid appreciation in oil prices.