Benchmark oil prices climbed to the highest since 2014 on Tuesday, as possible supply disruptions following attacks in the Middle East Bay contributed to an already narrow supply outlook.
Brent oil futures rose $ 0.74, or 0.9%, to $ 87.22 a barrel at 1446 GMT. US West Texas Intermediate (WTI) crude oil futures jumped $ 1.07, or 1.3%, to $ 84.89. Monday’s trade was subdued due to a US holiday.
Both benchmarks reached the highest since October 2014 earlier on Tuesday.
Concerns about supply have risen this week after Yemen’s Houthi group attacked the United Arab Emirates, escalating hostilities between the Iranian-affiliated group and a Saudi-led coalition.
After launching drone and missile attacks that set off explosions in fuel trucks and killed three people, the Houthi movement warned that it could target more facilities, while the United Arab Emirates said it reserved the right to “respond to these terrorist attacks”.
United Arab Emirates oil company ADNOC said it had activated business continuity plans to ensure uninterrupted delivery of products to its local and international customers following an incident at its Mussafah fuel depot.
Increased tensions between Ukraine and OPEC + member Russia are also contributing to geopolitical price awards.
In addition, some producers within the Organization of the Petroleum Exporting Countries (OPEC) are struggling to pump up their allowable capacity under an agreement with Russia and its allies to add 400,000 barrels per day each month.
OPEC will release its oil market report in January at 1230 GMT.
“The consensus is that the situation will not improve in the foreseeable future and growth in oil demand together with supply constraints will inevitably lead to a tighter oil balance,” says PVM analyst Tamas Varga.
Goldman Sachs analysts said they expect oil stocks in OECD countries to fall to their lowest level since 2000 this summer, with Brent oil prices rising to $ 100 later this year.