This week we saw headlines that included winter storms in the East, hostile conditions in the Middle East, and also what oil demand could look like this year. Starting off, two winter storms in the east caused severe power outages and delayed travel for an extended period of time. The Northeast was hit especially hard from the storm, with over 10 thousand without power at the peak, and over a foot of snow recorded in some areas.
This week in the Middle East, three people were killed in a drone attack by Houthi rebels in Abu Dhabi. The attack also destroyed three fuel tankers and some storage facilities. While the conflict in the east right now is not surprising, the fact that new technology was used in this attack in the form of drones raises some serious security questions for the Saudi government. An important question that needs answering is whether or not this attack came from the Houthis, or from Iran directly. If intelligence suggest that these attacks originated from Iran, tensions may start to get more severe.
Lastly, yesterday we took a look at what oil demand could look like in 2022. On Wednesday the International Energy Agency (IEA) said that global oil demand could reach far past pre-pandemic levels sometime this year. This comes primarily due to the fact that recent virus variants are proving to be less deadly, and the immunization rates around the world are skyrocketing. When the new IEA report came out yesterday, it reflected its demand growth forecast by showing a 200,000 barrel per day (bpd) increase, totaling up to a new 3.3 million bpd number.
Prices in Review
WTI Crude opened the week at $84.32. Prices rose consistently throughout the week before dropping today. Crude opened Friday at $84.57, an increase of $0.25 from Monday.
Diesel opened the week at $2.6345. Diesel followed the same trend as crude, climbing throughout the week before dipping on Friday. Today diesel opened at $2.6426, an increase of $0.0081 from Monday.
Gasoline opened the week at $2.4247. Prices were extremely volatile this week, with week lows coming on Friday. Today gasoline opened at $2.4402, up $0.0155 from Monday’s opening price.