Crude oil has risen in price for the sixth week in a row, reaching $87 per barrel of WTI today. This is still the highest price in nearly seven years.
Not even the rising value of the American dollar, which is used to settle crude oil transactions, can stop the increase. The reason? There still seems to be a problem with supply on the oil market.
OPEC+ is dosing "drop by drop"
A policy of moderate production growth from major producers may keep prices high. OPEC+ is scheduled to meet on February 2 and the market expects it to stay with the planned 400,000 barrels per day production increase for March.
Fear of what Russia will do
Oil prices have already risen about 15 percent since the start of the year as geopolitical tensions in Eastern Europe involving Russia, the second-largest oil producer and a key supplier of natural gas to Europe, and the Middle East may have fueled fears of supply disruptions.
A major factor in record inflation
On the demand side, China's oil imports could rise 6-7 percent this year. Buyers will increase purchases for new refinery units and replenish low inventories, according to a Reuters report.
High oil price is one of the key factors for high inflation rates around the world. If crude prices do not fall, inflation could continue to hit records in the first quarter of this year.
Daniel Kostecki, Director of the Polish branch of Conotoxia Ltd. (Forex service)
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