US consumer price growth increased 7 per cent year on year in December, the fastest pace since 1982, after a six-month rally in energy markets that has pushed up the cost of living around the world.
The White House has been calling on the world's leading oil producers to increase production faster to help control inflation. But Opec and its allies have stuck to a plan agreed in July last year to replace output cut at the start of the pandemic gradually, by just 400,000 barrels a day each month.
The strategy has helped oil prices track higher since August, and to recover quickly after the rapid spread of the Omicron coronavirus variant in November prompted a sell off.
But not all members of the Opec+ group — which includes producers such as Saudi Arabia and Iraq and allied countries such as Russia and Kazakhstan — have been able to hit their monthly targets, meaning the cartel has been increasing output by slightly less than its planned 400,000 b/d, analysts said.
In Europe — where natural gas is trading at historic levels due to high demand, low storage and tight supplies from Russia — fears over a possible Russian invasion of Ukraine are adding to uncertainty in the energy markets.
"Even if there is no supply disruption, [those] tensions are going to push [oil] prices to potentially US$100 a barrel," said Croft.
Bjarne Schieldrop, chief commodities analyst at Swedish financial group SEB, said it would be up to those producers with excess capacity, such as Saudi Arabia, to act if they wanted to prevent prices rising even higher.
"Struggling supply from Angola, Nigeria and Libya, together with exceptionally high natural gas prices and the tight global diesel market, are natural bullish forces for light sweet crude," he said.
"Given this, we might see countering action by those [Opec+] members left with spare capacity even if it means a break of their individual caps in order to prevent the oil price from shooting above US$100 a barrel."
- Financial Times