Two years ago the Covid-19 crisis broke out. With the planet at a standstill, demand reduced to little grief and tanks overflowing with oil, the price of black gold had seen red. In the spring of 2020, the Texan barrel, WTI, had fallen into negative territory, defying common sense, while the barrel of Brent from the North Sea, which serves as a benchmark on the world market, was trading at less than 20 dollars. Since then, the trend has reversed. Even if it is experiencing upheavals, the economy has started up again, helped by vaccination campaigns. The recovery is here and, with it, oil prices are soaring.
On Tuesday, the barrel of Brent settled above 87 dollars, a level that it had not reached since 2014. WTI, whose price oscillates more or less in parallel with that of Brent with a difference linked to quality, is trading at over $84. The increase in prices, which amounts to 12% since the beginning of the year, pushes some to speak again of a barrel at 100 dollars. Experts from the American bank Goldman Sachs are among them. This symbolic threshold could be reached as early as the third quarter of 2022.
Deficit market
The planets appear to be lining up for a price surge. First of all, the Omicron variant, initially perceived as a threat to oil demand, is proving, day after day, less dangerous than expected. It has caused fewer blockages and less damage to the economy. With the exception of a few cases, such as the Netherlands, governments have opposed strict containment, opting for targeted restrictions to limit the circulation of the virus. Then, the northern hemisphere is hit by a cold snap which increases the demand for heating. Finally, China, the world’s largest importer of rough, continues to demonstrate an insolent dynamic. In 2021, the Asian giant did better than expected by recording annual growth in its gross domestic product (GDP) of 8.1%, the highest in almost a decade.
Faced with sustained demand, is supply following? Very clearly, the answer is no, which is pushing prices higher. ” The world oil market [connaît] a larger deficit than expected, analysts at Goldman Sachs say. Meeting in early January, the thirteen member countries of OPEC and their ten allies, including Russia, decided to increase their production by 400,000 barrels per day in February. A reopening of taps too gradual to meet demand. The recent geopolitical tensions in the Middle East will not help matters. Houthi rebels in Yemen have claimed drone attacks on several targets in the United Arab Emirates, including airports and refineries. However, the country is the third producer of OPEC.
On the stock market, the surge in oil prices is doing business for companies in the sector. The company TotalEnergies rose by more than 1% on Tuesday, in a declining market, which brings its rise to nearly 13% since the start of the year. The manufacturer of seamless tubes Vallourec gained 4% over the same period. As for the operator of seismic surveys CGG, it jumped by almost 35%.
PC