Crude oil exceeded $100 / barrel after 8 years, why did it climb? Will it continue to rise?

As the situation in Russia and Ukraine becomes more tense, the price of oil, known as "black gold", has been climbing
.

According to data from Platts Energy Information Company of the United States, the spot price of Brent crude oil in the British market reached $100.
8 per barrel on the 16th, breaking 100 for the first time since 2014; the price of Brent crude oil futures also once exceeded $
96 per barrel.
Will crude oil continue to rise?

WTI crude oil futures prices have been rising
for a year.

Tight supply and demand boost spot crude oil "breaking 100"

Why are crude oil prices performing so strongly? Many people attribute the soaring oil prices to the Russia-Ukraine conflict, but industry insiders believe that in the final analysis, it is still a problem of
imbalance between supply and demand.

Han Zhengji, a crude oil analyst at Jinlianchuang, said that on the supply side, the OPEC (OPEC) report showed that due to the difficulty of some oil producing countries to increase production, OPEC production recovery speed is lower than the planned target, and the oil production of seven member countries has declined
.

Increased demand has also boosted crude oil futures prices all the way up
.

Li Yan, an analyst at Longzhong Information, told China News Finance, "For more than a year, Brent crude oil futures have broken through multiple integer points all the way
.
Exceeded $50 on December 10, 2020; Exceeded $60 on February 8, 2021; Exceeded $70 on June 1; Exceeded $80 on October 4; Exceeded $90 on January 28
, 2022.
This provides the price basis
for spot crude to break above $100.
”

Previously, crude oil futures broke through the $50 mark because of the progress in vaccine research and development in Europe and the United States, and the frequent release of positive news brought support
to the market.
Breaking through the $80 mark is a phased easing of epidemic data, coupled with the relaxation of control in many overseas countries, so that crude oil demand has not been greatly hindered
.

Li Yan said: "The demand outlook continues to be optimistic, and the supply has not increased significantly, which is an important reason for
the rise in crude oil prices.
" ”

The IEA (International Energy Agency) expects oil demand to exceed pre-pandemic levels in 2022, averaging 100.
58 million b/d
.
JPMorgan also expected oil prices to rise to $125 a barrel in 2022 and $
150 a barrel in 2023.

The geopolitical implications cannot be ignored

In addition to tight supply and demand, geopolitics and commodity inflation are also important drivers of
crude oil prices.

Li Yan said that Iran is an important oil producer, and the United States recently stated that negotiations with Iran have entered the final stage
.
Once the two sides reach an agreement, the supply of crude oil in the market will increase, which is a negative impact
on the price.

Lin Boqiang, dean of the China Energy Policy Research Institute of Xiamen University, pointed out that in terms of geopolitics, recent tensions between Russia and Ukraine, and Ukraine is an important energy channel in Europe, the market is worried about supply blockage
.
If the conflict between the two sides eases, the pressure on oil prices will decrease
.

At the same time, he said that the general rise in commodities is also a factor
affecting the rise in oil prices.
At present, coal, copper, aluminum, etc.
in commodities have risen strongly, which has also driven the price of crude oil up
.

A gas station
in Haidian District, Beijing.

Will crude oil continue to rise?

It is worth noting that after breaking 100 on the 16th, on February 17, international oil prices closed down
.

The NYMEX WTI March crude oil spot contract closed down $1.
90, or 2.
03%, at $91.
76 a barrel; The ICE Brent spot contract for April crude oil closed down $1.
84, or 1.
94%,
at $92.
97 a barrel.

What's next for oil prices? Most analysts believe that Iran and Ukraine are two key factors
in the short term.

Lin Boqiang said, "If the conflict between Ukraine and Russia does not worsen, then oil prices may remain stable or fall slightly
.
"

Xi Jiarui, crude oil analyst of Jinlianchuang, believes that the resumption of Iranian crude oil exports will play a positive role in increasing crude oil supply; The further easing of Russian-Ukrainian relations will also help the market squeeze out the bubble; In addition, most central banks in Europe and the United States said they would accelerate the implementation of monetary tightening, which also helped to curb the rise in
oil prices.

Xi Jiarui said: "On the whole, the momentum of further oil prices has begun to retreat, and crude oil is expected to fall back
below $90 / barrel.
" ”