Crude oil breaks past US$90 bbl barrier

Remember that lofty US$100 per barrel price prediction that Goldman Sachs put on crude oil this year?

Well, it turns out they might not be too far off the mark. Prices surged past the US$90 level for the first time since 2014 on ongoing supply concerns and a wave of cold weather in the US.

The global benchmark Brent climbed US$1.64 to US$91.11/bbl while the West Texas Intermediate crude soared US$2.01 to US$90.27/bbl.

Reuters quoted analysts as saying that concerns that extended cold weather, which has seen more than 200,000 losing power so far, could hit production in Texas.

This adds to ongoing geopolitical concerns around Russia’s aggressive posturing towards Ukraine.

“The tensions around the Ukraine conflict are providing support, and we have growing global demand and we’re not really ramping up supply to meet it,” Tradition Energy director of market research Gary Cunningham added.

Additionally, OPEC+ is expected to stick to planned moderate output increases, which are unlikely to make a dent on growing demand – assuming of course that individual members are capable of pumping more crude oil in the first place.

Feeding fuel into the crude oil fire

Things are certainly not helped by news that a floating production, storage and offloading vessel exploded offshore Nigeria on Wednesday.

The Trinity Spirit, which is capable of producing 22,000 barrels of oil per day and storing 50,000 barrels of oil, was reported to have 10 crewman on board prior to the incident. Shebah Exploration & Production Company is trying to ascertain their safety and security.

Meanwhile, operations at some major oil terminals in northwest Europe have reportedly been disrupted by a large-scale cyberattack on Thursday.

Antwerp in Belgium — Europe’s second-largest port after Rotterdam — and the major German port Hamburg were among those targeted, according to the AFP.

The attack rendered the terminals unable to process barges.