Oil climbs to seven-year high

2022/01/19 09:40:00

Oil climbs to seven-year high

Oil climbs to seven-year high

An outage on a pipeline from Iraq to Turkey has increased concern about an already tight supply outlook

19 January 2022 - 08:38 Sonali Paul and Roslan Khasawneh Picture: 123RF/EVGENII BASHTA Singapore — Oil prices rose for a fourth day to a seven-year high as an outage on a pipeline from Iraq to Turkey increased concern about an already tight supply outlook amid worrisome geopolitical troubles in Russia and the United Arab Emirates (UAE).18 January 2022 - 12:54 Shadia Nasralla and Rowena Edwards Picture: REUTERS London — Benchmark oil prices climbed to their highest level since 2014 on Tuesday as possible supply disruption after attacks in the Mideast Gulf added to an already tight supply outlook.18 January 2022 - 07:44 Sonali Paul and Roslan Khasawneh Picture: BLOOMBERG/ANDREY RUDAKOV Singapore — Oil prices rose more than $1 on Tuesday to a more than seven-year high on worries about possible supply disruptions after Yemen’s Houthi group attacked the United Arab Emirates, escalating hostilities between the Iran-aligned group and a Saudi Arabian-led coalition.18 January 2022 - 13:03 Marc Jones An employee passes share price information displayed on an electronic ticker board inside the London Stock Exchange.

Brent crude futures rose $1.04, or 1.02, or 1.2%, to $88.01, or 1.55 a barrel at 3.50 a barrel by 9.51am GMT, adding to a 1.5% as investors increasingly price in as many as four US Fed hikes this year and even one from the European Central Bank.

2% jump in the previous session.36, or 1.16am GMT, after earlier hitting a peak of $87.The benchmark contract climbed to as much as $89.05, its highest since October 13 2014.18 a barrel.US West Texas Intermediate (WTI) crude futures climbed $1.32, or 1.15, or 1.Both benchmarks touched their highest levels since October 2014 on Tuesday.“With pressure via US Treasuries resuming this morning, the market remains vulnerable, and Bunds look set to test the 0% yield before long,” Commerzbank analysts said.

4%, to $86.58 a barrel, adding to a 1.After launching drone and missile strikes which set off explosions in fuel trucks and killed three people, the Houthi movement warned it could target more facilities, while the UAE said it reserved the right to “respond to these terrorist attacks”.Trade on Monday was subdued as it was a US public holiday.9% gain on Tuesday.WTI earlier jumped to a high of $87.Also adding to geopolitical price premiums are rising tensions between Opec+ member Russia and Ukraine.08, its highest since October 9 2014.CommSec analysts said oil prices were being supported by colder winter temperatures in the northern hemisphere which were driving up demand for heating fuels.“If current geopolitical tensions continue and Opec+ members can’t deliver on their 400,000 barrel per day increase, macros [macroeconomic fundamentals] coupled with the strong technical outlook could see prices push towards the $100 mark,” CMC Markets’ analyst Ash Glover said.

Turkey’s state pipeline operator Botas said on Tuesday that it cut oil flows on the Kirkuk-Ceyhan pipeline after an explosion on the system.“The consensus is that the situation will not improve in the foreseeable future and oil demand growth together with supply constraints is inevitably leading to a tighter oil balance,” PVM analyst Tamas Varga said.The cause of the explosion is not known.The pipeline carries crude out of Iraq, the second-largest producer in oil cartel Opec, to the Turkish port of Ceyhan for export.Reuters Would you like to comment on this article or view other readers' comments? Register (it’s quick and free) or sign in now.Reuters.The loss comes as analysts are forecasting tight oil supply in 2022, driven in part by demand holding up much better than expected against the highly contagious Omicron coronavirus variant, with some calling for a return of $100 oil.Geopolitical issues in Russia, the world's second-largest oil producer, and the UAE, Opec’s third-largest producer, are adding to the supply concerns.On Monday, the People’s Bank of China unexpectedly cut borrowing costs on its medium-term loans for the first time since April 2020.

The UAE late on Tuesday called for a meeting of the UN security council to condemn an attack on Abu Dhabi on Monday by Yemen’s Houthi movement, which has threatened further attacks.Meanwhile, Russian troops are lined up on the border of Ukraine, with the White House calling the crisis extremely dangerous and saying Russia could invade at any point.The tension raises the prospect of supply disruptions at a time when Opec, Russia and their allies, together called Opec+, are already having difficulty meeting their agreed target to add 400,000 barrels a day of supply each month.“Opec+ is falling short of hitting their production quotas and if geopolitical tensions continue to heat up, Brent crude might not need much of a push to get to $100 a barrel,” Oanda analyst Edward Moya said in a note.Jet fuel consumption is rising with growth in international flights, while road traffic is much higher than the same time last year, Commonwealth Bank commodities analyst Vivek Dhar said in a note.Japan’s yen fell after the Bank of Japan said it would stick to its ultra-loose monetary policy, despite hopes that the economy is finally kicking clear of deflation.

“Opec+ supply constraints and the ongoing increase in global oil demand are likely to keep oil prices well supported in coming months,” Dhar said.Opec officials have told Reuters oil's rally may extend further in the next few months as demand recovers recovering demand and limited capacity in Opec+ to add supply and prices could break $100 a barrel.Reuters.

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Oil hits highest level in more than seven yearsSupply concerns have risen this week after Yemen’s Houthi group attacked the United Arab Emirates

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