Oil Futures Settle Sharply Higher

Oil prices rose sharply on Friday, extending recent gains, following a report from the International Energy Agency (IEA) that said oil production from OPEC and allies were significantly below target in January.

The IEA report said the group produced 900,000 barrels per day in January.

Also, the OPEC maintained its outlook for oil demand in 2022 but said there is an “upside potential to the forecast”, citing an ongoing observed strong recovery from the coronavirus pandemic.

“In most European countries, lockdowns and other restrictions are easing. Similarly, in the US, the Covid-19 pandemic has been well contained through vaccinations and other containment measures,” OPEC said.

West Texas Intermediate Crude oil futures for March ended higher by $3.22 or about 3.6% at $93.10 a barrel, a fresh 7-year closing high.

Oil prices rose today despite concerns about rising inflation, aggressive Fed rate hikes and possibility of Iranian oil entering the market and boosting global supplies.

White House spokeswoman Jen Psaki said Iranian nuclear talks have “reached an urgent point,” and that a “deal that addresses the core concerns of all sides is in sight.”

Meanwhile, White House National Security Adviser Jake Sullivan has warned that a Russian invasion of Ukraine could happen “any day now.”

Dat from Energy Information Administration showed earlier this week that U.S. crude oil stockpiles unexpectedly fell 4.8 million barrels in the week to Feb. 4 as overall refined product demand reached an all-time record.

According to a report from Baker Hughes, the rig count in the U.S. has risen by 19 to 516, the highest since April 2020.

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