Momentum in Oil Prices Remain Firm, Brent Hits New High At $90

• Momentum in oil prices has remained firm in recent weeks as the supply shortage in the energy market has been supporting the commodity despite recent market turmoil.
• We saw that Brent futures contract broke above its LT downward trending resistance line in October 2021, and the recent reduction in Covid restriction could continue to levitate crude oil prices to multi-year highs.
• Brent futures front month surged to $90 in today’s trading session, its highest level since October 2014.
• Many sell-side analysts are forecasting oil prices to surge to (or above) $100 a barrel this year as global market tightens.
• The significant backwardation in the oil curve last year has once again confirmed its ‘predictability power’; an oil curve in backwardation has generally led to higher oil prices in the next 6 to 12 months.

Source: Bloomberg/MNI