Opinion: January 21, 2022. Can Oil Reach US$ 100 per Barrel Soon?

The price of oil has been increasing recently. This increase in price impacts transportation and it is also a reflection of other fossil fuel prices which have important uses such as heating and electricity generation.

The price of West Texas Intermediate has been oscillating between US$ 85 and 87 in the past few days. However, there are reasons to believe that the price will increase soon.

There is a supply problem. The OPEC countries are not willing to use their spare production capacity and this spare production capacity by itself is diminished compared to previous values.

Due to the push to increase the use of "green" alternatives, the investment for the development of new sources of oil has decreased significatly, so there will be less "new oil" in the market.

There is a brewing demand problem. As the COVID-19 pandemic is about to end, it is expected that the demand for oil will start increasing soon.

Finally, there is geopolitics. Recent events in Central Asia, Eastern Europe and the Middle East may represent the possibility of a major international crisis that will end up causing an increase in the price of oil.

For further information, take a look at this article.

This post is intended to only raise awareness. In order to make actual financial decisions please contact your financial advisor and/or tax advisor prior to making the decision.