Amid the rising tensions in the Middle East and increasing concerns about the Russia-Ukraine discords, the oil prices witnessed a hike on Monday, January 24. The price hike was seen after the disturbance in the supply due to the above reasons; this has made the tight markets tighter.
Brent crude rose by 33 cents, 0.4 percent to $ 88.22 a barrel by 1149 GMT, while the US West Texas Intermediate (WTI) crude picked up 24 cents, 0.3 percent to $ 85.38.
Commerzbank analyst Carsten Fritsch stated that oil prices are increasing due to supply risks and geopolitical tensions.
The analyst further mentioned, “The Ukraine conflicts and the situation in the Middle East have been the prominent reason behind the hike in the oil prices as these are the majorly involved members of OPEC+”.
Meanwhile, it is forecasted that Barclays might raise the average oil prices by $ 5 a barrel in 2022. The bank has increased the average price for this year to $ 82 and $ 85 a barrel for WTI and Brent, respectively. The benchmarks were rose for a fifth week in a row, gaining about 2 percent since October 2014.
Oil prices have risen more than 10 percent this year due to concerns about tightening supplies, seemingly out of step with global stock markets, which have been battered by a big sell-off sparked by fears of tighter monetary policy around the world.
The oil market has been tight, with OPEC+ struggling to meet its goal of increasing supply by 400,000 barrels per day each month (BPD).
Reportedly, the energy market would be hit if the tensions turned into a conflict. There are chances that the tensions might prompt a “material spike” in the oil prices as Europe depends upon Russia for around 35 percent of the natural gas.
However, even at such an “uneasy period”, Russia supplied the energy to Europe on Monday.
In the Middle East, on Monday, the United Arab Emirates destroyed two Houthi ballistic missiles following two massively destroying and deadly attacks.