Home MOREENERGY Russia-Ukraine fears, & rising tensions in Middle-East push up oil prices

Russia-Ukraine fears, & rising tensions in Middle-East push up oil prices

by asma
OPEC+

Concerns about supply disruption amid rising tensions in Eastern Europe and the Middle East pushed oil prices up on Monday as OPEC+ is struggling to hit its monthly output increase target of 400,000 barrels per day (bpd), Reuters reports.

Brent crude futures rose 58 cents, or 0.7%, to $88.47 a barrel by 0742 GMT, reversing a 0.6% loss on Friday.

U.S. West Texas Intermediate (WTI) crude futures gained 57 cents, or 0.7%, to $85.71 a barrel, having fallen 0.5% on Friday.

Both benchmarks rose for a fifth week in a row last week, gaining around 2% to hit their highest since October 2014. Prices are already up more than 10% this year on the concerns over tightening supplies.

“Investors remained bullish due to geopolitical risk between Russia and Ukraine as well as in the Middle East, while OPEC+ continued to fail to reach its output target,” said Kazuhiko Saito, chief analyst at Fujitomi Securities Co Ltd.

“An expectation for higher heating oil demand in the United States amid cold weather also added to pressure,” he said.

OPEC+ compliance with long-installed oil production cuts rose to about 122% in December, two sources from the producer group told Reuters, indicating that some members continue to struggle to raise their output.

“Expectations that OPEC+ members such as Saudi Arabia and Russia are likely to keep the current policy of gradual increase of output to maintain Brent oil prices between $85 and $90 a barrel are providing support to an overall sentiment,” said Tetsu Emori, CEO of Emori Fund Management Inc.

In the United States, petroleum inventories have continued to slide over the last month, while energy firms cut oil rigs this week for the first time in 13 weeks. Analysts expect cold weather to boost heating demand over the next few weeks.

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