(Bloomberg) -- Oil headed for a seventh weekly gain as investors fret over a fast-tightening market, geopolitical tensions and freezing weather in the U.S.
West Texas Intermediate held near a seven-year high above $90 a barrel, set for a jump of about 4% this week. Brent has surged 17% since the year began and banks including Goldman Sachs Group Inc (NYSE:GS). forecast that it’ll hit $100.
Gains this week have been driven by a combination of factors. Investors have expressed doubt the Organization of Petroleum Exporting Countries and its allies can deliver in full on plans to boost output. At the same time, traders are tracking the situation in Ukraine amid concerns Russia plans to invade, which Moscow has denied. In Texas, a wave of freezing weather has hit some supply.
Oil has rallied 60% over the past year, joining a broad rally in commodities, as demand roared back from the impact of the coronavirus pandemic. The upsurge has eroded stockpiles, and prompted traders to pay steep premiums for near-term supplies. The jump will fan inflationary pressures, squeezing consumers and alarming politicians concerned about the fast-rising cost of living.
Still, as prices forged higher there have been a couple of warnings. Citigroup Inc (NYSE:C). set a bearish position for December Brent futures, saying it’s comfortable with taking a contrarian view as the market will swing to a surplus.
ConocoPhillips (NYSE:COP) also warned that traders should be concerned about strong oil-production growth in the U.S. this year and in 2023. “If you’re not worried about it, you should be,” Chief Executive Officer Ryan Lance said.
Among industry data due later on Friday is the Baker Hughes rig count for the U.S., an indication of shale-production activity. This week’s print may top 500. That’s a rebound from the pandemic-era low of 172 in August 2020.
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