The oil price is on the rise. Analysts are increasingly questioning whether manufacturing can keep up with demand. Concerns about lagging demand continue to fade into the background.
The quotation for Brent oil closed more than $1 higher on the first trading day of this year, compared to Friday, December 31, at $78,98 per barrel. This upward trend has maintained the price and on Friday, January 7, the price is at $82,68 per barrel. This means that Brent oil has made a gain of approximately 6% in the first week.
One of the first stimuli for the market came from OPEC+. The members of the cartel had a meeting on January 3 and 4. At this meeting it was decided to increase production by 400.000 barrels per day for February. The question, however, is whether the oil-producing countries are able to pump that much oil. Data for December shows that 180.000 barrels per day less were produced in December than there was room for in the quota.
Problems in Kazakhstan
The unrest in Kazakhstan gave the price a boost in the second half of the week. It is not well known to the general public, but the country in Central Asia is a major oil producer. Approximately 700.000 barrels per day are pumped from the largest oil field, the Tengiz field. The American Chevron is the largest foreign oil company active in Kazakhstan, but companies such as Shell, Exxon Mobil and TotalEnergies are also involved in oil extraction from the country's resources.
Production from the Tengiz field is lower due to transport problems, a spokesperson for Chevron, which has a 50% share in the operating company of this field, reported to the Reuters news agency. “Multiple subcontractors have disrupted train connections to help protesters in the country.” A spokesperson for Shell, which is involved in the Karachaganak and Kashagan fields, said production from those fields continues.
Diesel price jumps
The diesel price has risen faster than the oil price. On Monday January 3, the price was €120,35 per 100 liters. That is €7 per 124,41 liters on Friday, January 100, the highest price ever. This has canceled out the decline in the oil and diesel market (after the outbreak of the omikron variant). A small part of the increase in diesel is due to the increase in excise duties. Due to the inflation correction, €0,678 per 100 liters has been added. The rate for medium oil and gas oil therefore amounts to €52,846 per 100 liters. This means that at the current daily price, 42% of the diesel price consists of excise duty.