New markets boost Canada's oil exports
Money is gushing back into oil.
While total holdings in the main oil and fuel futures contracts collapsed late-last year, the first few days of 2022 have seen almost 500,000 contracts added to the oil market. That’s the equivalent of almost half a billion barrels, a sign that the new year has begun with a flurry of liquidity in the crude market.
The burgeoning flows underpin a resurgence in Brent crude prices back above US$85 a barrel in London to about US$1 shy of a multi-year high set in 2021.
With the omicron variant appearing more mild, the International Energy Agency said this week that demand appears to have been faring better than expected in recent weeks.
One hedge fund has even been eying US$200 a barrel due to a lack of exploration and investment in the longer-term.
The holdings have increased at the fastest pace since 2019.