Title: Oil prices gain after IEA says market tight

Feb 11, 2022 07:11AM ET

By: AnalysisWatch

Oil prices rose on Friday after the International Energy Agency said oil markets were tight but still headed for weekly losses on inflation concerns and tensions between the US and Iran that could increase global supply.

At 1203 GMT, Brent crude futures were up $1.01, or 1.1%, at $92.42 a barrel, while US West Texas Intermediate crude was up $1.15, or 1.3%, at $91.03 a barrel.

However, prices are on track for their first weekly decline after seven straight weekly gains.

The United Arab Emirates and Saudi Arabia could help calm volatile oil markets if they pumped more crude, the IEA said on Friday, adding that the OPEC+ alliance produced 900,000 barrels per day less than planned in January.

The two OPEC+ producers have the sparest production capacity and could help draw down shrinking global oil stocks, which are among the factors pushing prices towards $100 a barrel and exacerbating inflation worldwide.

The IEA also raised its demand forecast for 2022 by 800,000 bpd, based on revisions to historical data. The IEA expects global demand to increase by 3.2 million bpd this year, reaching a new record of 100.6 million bpd.

This comes after the Organization of Petroleum Exporting Countries said global oil demand could rise even more this year amid a strong post-pandemic economic recovery.

However, the prospect of an aggressive interest rate hike by the US Federal Reserve and ongoing talks between the United States and Iran over Iran's nuclear program prevented further price increases.

Indirect talks between the United States and Iran to revive a nuclear deal resumed this week after a 10-day hiatus. An agreement could lead to the lifting of sanctions on Iranian oil and ease the global supply shortage.