The causes that explain the world energy crisis that keeps prices on the rise

Energy oil world Problems

Oil markets rose for the sixth day in a row on Tuesday, driven by tighter supply and a firm demand outlook, but China’s power shortage, which affects industrial production, dampened the rally.

Brent was up 67 cents, or 0.8%, at $80.20 a barrel after hitting $80.75, its highest level since October 2018, after rising 1.8% the day before.

U.S. West Texas Intermediate (WTI) rose 79 cents, or 1%, to $76.24 a barrel, after hitting a session high of $76.67, its highest since early July. The contract jumped 2% on Monday.

Hurricanes Ida and Nicholas, which hit the Gulf of Mexico, damaged platforms, pipelines and processing centers, paralyzing most offshore production for weeks.

Supply has also been affected as Nigeria and Angola, the main African oil exporters will have difficulty increasing production to their quotas set by OPEC until at least 2022 due to investment and maintenance problems, sources warned.

Their problems mirror those of several other members of the OPEC + producer group who have been holding back production to support prices but are now failing to increase pumping to meet recovering demand.

Oil Markets

Oil price projections

Barclays raised its forecast for the price of oil in 2022 on Tuesday because a continued recovery in demand could widen a “persistent” supply shortfall.

The bank raised its estimate for the price of Brent crude in 2022 by $9 to $77 a barrel, driven in part by “lower confidence” in the reactivation of the nuclear deal between the United States and Iran.

Expectations of a tight supply, coupled with rising coal and gas prices, pushed oil prices higher for the sixth straight session on Tuesday, pushing Brent crude futures above $80 a barrel. while U.S. crude rose to around $76.

“The gradual increase in OPEC + pumping would not close the oil supply gap until at least the first quarter of 2022, as the recovery in demand is likely to continue to outpace it, due in part to the limited capacity of some oil producers. group to raise its production,” Barclays said in a note.

This month, the Organization of the Petroleum Exporting Countries (OPEC) and its allies, a group known as OPEC +, agreed to stick to their July decision to gradually lift record production cuts.

Barclays analysts noted, however, that “the threat of limited market share from growth in U.S. production means there is no urgency for OPEC + producers to step on the accelerator.”

Morgan Stanley also predicted an under-supplied market in 2022, with prices of $85 a barrel in its “bullish” scenario.