On Thursday, Feburary 3, U.S. crude benchmark West Texas Intermediate rose above $90 a barrel–it closed at $90.87, up 0.60% for the day, for the first time since 2014. International benchmark Brent crude gained 0.42% to close at $91.53 a barrel.
Of course, it took a wild confluence of events to push prices above $90.
First, a huge winter storm in Texas threatens to shutdown some production in the Permian Basin.
Second, OPEC+ looks unlikely to be able to increase production to the levels agreed at the organization’s meeting this week.
And, third, the possibility of conflict between Russia and Ukraine that results in sanctions on Russia oil and natural gas exports continue to roil markets, especially European markets.
The path from here? On recent price action it looks like oil will go higher. “The path of least resistance remains to the upside, when we got through yesterday’s high the volume picked up and the rocket ship blasted off,” Spencer Vosko, director for crude oil at Black Diamond Commodities told Bloomberg. A pick up in trading volume even with higher prices is usually an indicator that the market will move higher.
Crude is heading for a seventh weekly gain, with banks including commodity trading heavyweight Goldman Sachs, seeing oil moving toward $100 a barrel.
I’ve recently added shares of ConocoPhillips (COP) Equinor, (EQNR), Pioneer Natural Resources (PXD), Cheniere Energy (LNG), and the Energy Select Sector SPDR ETF (XLE) to my portfolios.