Muscat: For the first time since April 2019, crude oil prices rose to a new high and traded above $75 a barrel on Tuesday.
While the US West Texas Intermediate (WTI) crude futures rose by 0.03 per cent to $73.68, the Brent crude futures also rose 0.35 percent to $75.16 a barrel.
Most of the crude oil benchmarks have seen a steady rally in prices in the past few weeks and experts expect the prices to continue to rise as global COVID-19 vaccination drives speed up and economic sentiments turn positive.
Meanwhile, the Oman oil price (August delivery 2021) on Tuesday reached $72.86 (OMR28), an increase by 95 cents (400 baisas) from the price on Monday, which was at $71.91 (OMR27.7).
“The average price of Oman oil (June Delivery 2021) has stabilised at $63.10, thus it’s $1.33 per barrel lower than May Delivery 2021,” Dubai Mercantile Exchange (DME) said.
BofA Global Research raised its Brent crude price forecasts for this year and next, saying that tighter oil supply and recovering demand could push oil briefly to $100 per barrel in 2022.
“Last year, many economies had scaled back operations because of the COVID-19 pandemic, which meant industries were closed, people were required to stay home, and many economic activities were suspended,” said Ramanuj Venkatesh, a financial analyst in the country.
“The increase in oil price is because of the increased economic activity and demand for goods, compared to last year.
“Furthermore, although many countries are turning to green fuels, building economies on renewables such as solar energy and wind will take some time,” he added.
“Oil is here to stay for the foreseeable future. Our cars need fuel to drive, industries require oil to run, and power plants generate electricity from oil and gas. Many of our day-to-day needs are still met by fossil fuels.”
Sarweshwar Biyani, the Vice President (Finance and Accounts) at SV Pittie Sohar Textiles said the rise in oil price would help balance Oman’s budget deficits.
“The higher oil price and its upward trend will certainly give an extra edge to economic performance,” he said.
“Government revenue will increase, and budget deficits will be lower than expected. This will reduce the requirement of debt which will further help save on interest.”
“Overall, this will strengthen the financial position of Oman, which will help achieve better credit ratings from international agencies,” he said.