Oil prices may touch $100 again

Muscat: With Oman oil price rising by $2.46 to reach $92.93 on Monday, analysts expect the price to touch $100 a barrel or more during this week or the next.

“There are several reasons that helped the rise in price, events on the international scene being one of them. I think it will further reach $100 per barrel or more during this week or the next,” Khalfan Al Tawqi, an economic analyst, speaking exclusively with the Times of Oman, said.

He added that the hike in prices will enable Oman to achieve its Five-Year Plan projections with ease, while helping to accelerate the realisation of plan targets.

Across the world, Brent crude futures were at $95.61 a barrel by 5:06 GMT, up to $1.17, after earlier hitting a peak of $96.16, the highest since October 2014.

Edward Moya, an analyst for foreign exchange brokerage firm OANDA, also said oil prices could cross the $100 mark.
“Besides, with global economic activity returning to normalcy after a two-year disruption due to COVID-19, the price of Oman oil is set to move upwards following the increasing demand for oil worldwide,” said Al Tawqi.

“Add to this the OPEC and OPEC Plus agreement deciding not to increase production, and the higher price of a barrel of Oman oil is a certainty,” he said.

Also, with the US deciding not to subsidise shale oil because of its high costs, Omani oil price is bound to head northward, he said. Besides, the high cost of gas in global markets led to an increase in the demand for oil.

Listing the positive aspects of the price-rise on Oman’s economy, Al Tawqi said it would open up for the Sultanate a whole host of opportunities.

“One of them would be a transformation of Oman into a revenue surplus state from a deficit that has been the case for several years now, or 2012, to be precise,” he explained. “It would also enable the Sultanate to seek concessional loans from internal and as well as external sources.

“It would also help the Sultanate get a better credit rating and reduce the financial pressures enabling the country to inaugurate more liberal policies in place of the austerity measures it has been forced to adopt all these days,” he summed up.

“It would also afford the Sultanate a way to pay off the public debt in a timely manner.”