Vicky Price: 'Gone are days Scotland benefitted from oil prices'

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The latest climbing in prices has been dominated by the Omicron variant, which hasn’t stopped motorists getting on with their lives. Supply disruptions in Libya and Ecuador have also kept markets tighter than experts expected, pushing oil prices above the $80 per barrel mark.

On Tuesday, London-traded Brent, the global benchmark for oil, settled up $2.85, or 3.5%, at $83.72 per barrel after peaking at a two-month high of $83.93 during the session.

Brent is expected to average $75 per barrel this year, up $4 from its 2021 average, the Energy Information Administration (EIA) said in its Short-Term Energy Outlook (STEO) report.

US WTI was expected to climb from last year’s average of $68.21 to $71.32 this year, the EIA said.

The premier agency for America’s energy data also forecast that US oil production was expected to reach a record average of 12.4 million barrels daily by next year as output catches up with the slowdown caused by the coronavirus pandemic.

The EIA said the monthly STEO monthly continues to reflect “heightened levels of uncertainty” due to the ongoing pandemic and emerging coronavirus variants such as the latest publicized strain, the Omicron.”

The agency added: “In addition to macroeconomic uncertainties, uncertainty about winter weather and consumer energy demand also present a wide range of potential outcomes for energy consumption.

Federal Reserve Chairman Jerome Powell said the economy should withstand the current COVID-19 surge with only “short-lived” impacts and said, “it is a long road” to anything close to restrictive monetary policy.

The price shift was immediately discussed on social media with many expressing their disappointment over the surge.

One twitter user, Kennyhd, said: “I’m not aware of a sudden world shortage of oil or gas, production may have reduced as peak Covid slowed demand, but high prices should always correct undersupply.

“Germany shuts nuclear, burns coal and has 2 Russian gas pipelines, UK has expensive overly subsidised wind turbines!”

Local MP, Bell Ribeiro-Addy tweeted: “North Sea oil & gas companies are set to report near-record cashflows of £14.9bn this year.

“But the Government has ruled out a windfall tax on these companies to reduce soaring energy bills, with a Tory minister saying they are ‘struggling’. Tell that to my constituents!”

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According to the officials, pressure is mounting on Rishi Sunak, chancellor, to levy a one-off windfall tax on UK offshore oil and gas operators, just weeks after the boss of BP said high commodity prices had turned his company into “a cash machine”.

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