WTI hits $87.00 level for first time since 2014 as Iraq-Turkey pipeline outage sparks fresh supply concerns


  • WTI hit $87.00 for the first time since September 2014 on Wednesday.
  • A momentary outage of an Iraqi-Turkish pipeline was attributed as driving the most recent gains.
  • But the broader themes of tighter than expected market conditions and rising geopolitical concerns are also keeping oil underpinned.

Oil prices scaled fresh multi-year highs on Wednesday with front-month WTI futures hitting the $87.00 per barrel level for the first time since September 2014. Market commentators have cited news of disruption in oil flows along a pipeline carrying crude from Northern Iraq to Turkish port Ceyhan as behind the latest run of gains. Oil flows along the Kirkuk-Ceyhan pipeline (estimated at about 150K barrels per day) have since resumed on Wednesday, with the disruption as a result of a falling power pylon, not an attack as some had feared.

So all in all, the one-day disruption amounts to little more than a drop in the ocean in terms of global oil supply. But the news was enough to add further momentum to the idea that global oil markets at the start of 2022 are significantly tighter than expected just a few months ago, whilst demand remains resilient. Recall that smaller OPEC+ nations have struggled to keep up with rising output quotas in recent months, leading to excessively and involuntarily high levels of compliance to the group’s output cut pact (about 127% at the end of 2021).

Meanwhile, geopolitical concerns about supply security have amped up this week amid fears that Russia (the world’s third-largest supplier of roughly 11M barrels per day) might be on the brink of invading Ukraine. Meanwhile, tensions in the Middle East and around the Gulf Strait between the Saudi-led Sunni coalition and Iran-backed Shia militias based in Yemen rose earlier in the week after the former launched a surprise attack on the latter’s oil infrastructure.

Though the IEA, in its monthly report released on Wednesday, said that oil markets would return to surplus after Q1 2022, the agency raised its global demand growth forecast for the year. The agency also warned that commercial oil and fuel stocks in developed countries had fallen to their lowest levels in seven years and, as a result, any potential dents to supply this year could result in higher than usual levels of oil market volatility. Analysts continue to call for tighter than expected oil market conditions in 2022 to result in (Brent) hitting $100 per barrel.  

Ahead, attention now turns to the release of weekly US private API inventory figures which will be released at 2130GMT and are likely to show crude oil stocks being drawn on for an eighth consecutive week.

WTI US Oil

Overview
Today last price 86.27
Today Daily Change 1.07
Today Daily Change % 1.26
Today daily open 85.2
 
Trends
Daily SMA20 78.07
Daily SMA50 75.12
Daily SMA100 75.87
Daily SMA200 72.05
 
Levels
Previous Daily High 85.3
Previous Daily Low 83.54
Previous Weekly High 83.74
Previous Weekly Low 77.44
Previous Monthly High 77.26
Previous Monthly Low 62.34
Daily Fibonacci 38.2% 84.63
Daily Fibonacci 61.8% 84.21
Daily Pivot Point S1 84.05
Daily Pivot Point S2 82.91
Daily Pivot Point S3 82.29
Daily Pivot Point R1 85.82
Daily Pivot Point R2 86.45
Daily Pivot Point R3 87.59

 

 

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Feed news Join Telegram

Recommended content


Recommended content

Editors’ Picks

AUD/USD bulls flirt with 0.7100 with eyes on Aussie Retail Sales, US PCE Inflation

AUD/USD bulls flirt with 0.7100 with eyes on Aussie Retail Sales, US PCE Inflation

AUD/USD holds onto the recently sidelined moves around 0.7100 as bulls and bears jostle over mixed clues heading into the key data on Friday. Also restricting the Aussie prices are downbeat statistics at home and looming economic fears over the largest customer China.

AUD/USD News

EUR/USD: Bulls are taking control and eye the 1.08 area

EUR/USD: Bulls are taking control and eye the 1.08 area

EUR/USD's market structure is now bullishon the daily chart. Euro's support near 1.0705 could offer a base from which bulls can engage in order to target the 1.08 areas. For the FOMC minutes, the pair was based at the targetted support area and there were prospects of a higher correction from support.

EUR/USD News

Gold bounces from $1,850, DXY remains soft on soaring market mood

Gold bounces from $1,850, DXY remains soft on soaring market mood

Gold price (XAU/USD) witnessed a minor pullback towards $1,850.00 in its initial trading hours but has bounced back sharply. The precious metal is displaying a balance auction in a range of $1,840.76-1,856.35 from Wednesday.

Gold News

Will Cardano price finally show its cards?

Will Cardano price finally show its cards?

Cardano price is preparing for a retest of $0.80. Still, jumping in early might be too risky. Traders should wait for confirmation signals.

Read more

FXStreet Premium users exceed expectations

FXStreet Premium users exceed expectations

Tap into our 20 years Forex trading experience and get ahead of the markets. Maximize our actionable content, be part of our community, and chat with our experts. Join FXStreet Premium today!

BECOME PREMIUM

Forex MAJORS

Cryptocurrencies

Signatures