As investors remained optimistic about oil demand and Libyan crude oil production declined, international crude oil futures prices first fell and then rose on January 3, 2022, and closed higher
at the end of the day.
Light crude futures for February 2022 delivery rose $0.
87, or 1.
16%, to settle at $76.
08 a barrel on the New York Mercantile Exchange by the close of the day
.
London Brent crude futures for March 2022 delivery rose $1.
20, or 1.
54%, to settle at $78.
98 a barrel
.
Libya's national oil company announced on the 2nd that it will carry out a week-long overhaul of the main pipeline connecting the Samah and Al Dhahra fields with the ESidra port this week, which will reduce crude oil supply by 200,000 barrels per day
.
Phil Flynn, senior market analyst at the US Price Futures Group, said on the 3rd that it seems unlikely that OPEC will change its existing production policy, and is expected to announce on the 4th that it will raise the average daily crude oil production limit of the members of the February production reduction agreement by 400,000 barrels
.
Flynn said Libya's crude oil production fell by another 200,000 barrels per day due to pipeline repairs as OPEC expected supply shortages in the next two quarters, becoming a bigger problem
.
This should be very supportive for oil prices, especially if Belial crude oil production does not recover in time
.
Giovanni Staunovo, an oil analyst at UBS, said oil demand will pick up higher than in 2019 in 2022, which will benefit
crude and refined product prices.
Brent crude futures are expected to be in the $80 to $90 per barrel range in 2022
.
Helima Croft, head of global commodities strategy at RBC Capital Markets, said that while cases of the Omicron variant continue to increase in major countries, the lack of widespread lockdowns is likely to dampen
concerns about oil demand in the short term.
PVM Oil Associates analyst Tamas Varga said that the number of new crown infections in the world is increasing, many countries have implemented epidemic prevention and control restrictions, and air travel and other sectors have been hit, but investor optimism
can still be felt.
In short, Waga said, 2021 proved that while there were unexpected twists and turns on the road to victory, the war against the coronavirus pandemic could be won
.
Croft believes that the market continues to focus on the two geopolitical issues
of the confrontation between Russia and Ukraine and the Iranian nuclear negotiation.
