Oil prices rise on supply fears amid tensions in Eastern Europe, Middle East

Tokyo, Jan. 24 (BNA): Oil prices rose on Monday on fears of supply disruptions amid escalating tensions in Eastern Europe and the Middle East, which could make the already tight market more tight, while the Organization of the Petroleum Exporting Countries and its allies continued to struggle to increase prices. Produce.

Brent crude futures rose 81 cents, or 0.9 percent, to $88.70 a barrel by 0344 GMT, reversing a 0.6 percent loss on Friday.

US West Texas Intermediate crude futures rose 72 cents, or 0.9 percent, to $85.86 a barrel, after falling 0.5 percent on Friday.

Both benchmarks rose for the fifth consecutive week last week, gaining about 2% to their highest level since October 2014. Prices have already risen more than 10% this year on fears of tight supplies.

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

“The expectation that the demand for heating oil in the United States will rise amid cold weather has also increased the pressure,” he said.

Raising fears of supply disruptions in eastern Europe, the United States on Sunday ordered the departure of family members of its embassy staff in Ukraine, citing Russia’s continuing threat of military action, according to Reuters.

The New York Times reported late Sunday that US President Joe Biden is considering deploying several thousand US troops to NATO allies in Eastern Europe and the Baltic states.

A senior British minister said on Sunday that Russia would face severe economic sanctions if it installed a puppet regime in Ukraine, after Britain accused the Kremlin of seeking to put a pro-Russian leader in power there.

The UAE Ministry of Defense stated that it destroyed in the Middle East two ballistic missiles belonging to the Houthis that targeted the Gulf state on Monday, without causing any casualties.

OPEC+, which brings together the Organization of the Petroleum Exporting Countries (OPEC) with Russia and other producers, is struggling to meet the target of increasing monthly production of 400,000 barrels per day.

Two sources from the producer group told Reuters that OPEC+ compliance with long-awaited oil production cuts rose to about 122% in December, indicating that some members are still struggling to increase their production.

“Expectations that OPEC+ members such as Saudi Arabia and Russia are likely to maintain the current policy of gradually increasing production to keep Brent oil prices between $85 and $90 per barrel supports the general sentiment,” said Tetsuo Emori, CEO of Emori. Fund Management Inc.

The US Commodity Futures Trading Commission (CFTC) said on Friday that money managers raised their net US crude futures contracts and options in the week ending January 18.

In the US, oil inventories continued to decline over the past month, while energy companies cut oil rigs this week for the first time in 13 weeks. Analysts expect the cold weather to increase heating demand over the next few weeks.

HF