Still the longer-term outlook for oil remains favorable, he told MarketWatch. U.S. output hasn’t yet responded to higher prices, compliance among OPEC+ members to individual production quotas remains above 100%, and the demand outlook continues to improve as “omicron fears fade and growth outlooks rebound.”

WTI crude for March deliveryfell 41 cents, or 0.5%, to settle at $85.14 a barrel on the New York Mercantile Exchange, trimming the U.S. benchmark’s weekly advance to 2.2%, according to Dow Jones Market Data. March Brent crude, the global benchmark, lost 49 cents, or nearly 0.6%, at $87.89 a barrel on ICE Futures Europe, for a 2.1%weekly gain. Both WTI and Brent closed Wednesday at their highest since October 2014 and marked a fifth consecutive weekly gain.

“Crude prices may not have a one-way ticket to $100 oil, but the supply-side fundamentals certainly support that could happen by the summer,” said Edward Moya, senior market analyst at OANDA, in a market update. “The next few trading sessions could be difficult for energy traders as oil prices may move more so on investor positioning ahead of Wednesday’s FOMC policy decision and over a handful of brewing geopolitical risks, that include Russia-Ukraine tensions, Iran nuclear talks, and developments with global handling over North Korea,” Moya said.

Friday’s decline followed minor losses Thursday, the day the Energy Information Administration reported that U.S. crude inventories, excluding the SPR, unexpectly climbed by 500,000 barrels for the week ended Jan. 14. The EIA also reported a weekly inventory increase of 5.9 million barrels for gasoline, while distillate stockpiles fell by 1.4 million barrels.

Crude prices had “recently been reacting only to news that supported higher prices, such as temporary supply outages that have meanwhile been resolved. The question now is whether the correction will continue or whether the lower price level will be viewed by market participants as a buying opportunity,” said Carsten Fritsch, analyst at Commerzbank, in a note. “Both scenarios are possible as things currently stand.” 7-year high WTI oil futures traded at their highest since October 2014 this week. Crude Oil CAnalysts said a continued slide in equities was taking a toll on sentiment for other assets viewed as risky.

A sharp rise in Treasury yields tied to expectations for a series of rate increases by the Fed that is expected to be more aggressive than previously expected has been blamed for a stock-market selloff that’s sent the tech-heavy Nasdaq Composite into correction territory, while also dragging down other major indexes, including the Dow Jones Industrial Average and the S&P 500. Growing risks to global supplies provided support for oil prices overall for the week, spurring talk of an eventual rise to $100 a barrel. WTI and Brent haven’t traded at a level that high since 2014. The market has been closely following geopolitical developments this month, including unrest in Kazakhstan, an attack on oil infrastructure in the United Arab Emirates, a temporary disruption to crude flows through the Kirkuk-Ceyhan pipeline and the possibility of a Russian invasion of Ukraine. On Friday, tensions in the Middle East worsened as a Saudi-led coalition airstrike on Houthi-controlled territory in Yemen hit a prison, killing dozens of people, according to The Wall Street Journal. Oil prices are likely to reach $100, but “without a serious geopolitical shock,” that may not happen until next year, Matthew Parry, head of long-term analysis at Energy Aspects, recently told MarketWatch. “The main cause of this predicted upside will be total liquid [petroleum] demand consistently outpacing relatively anemic supply growth — a consequence of years of insufficient [capital expenditures] — as persistent deficit coincides with relatively low levels of global stocks,” he said.

Have a Great Day,