Oil prices benefited from tensions around the world. Prices rose on Monday on worries regarding supply disruption amid concerns about Russia-Ukraine discord and rising tensions in the Middle East.
Brent crude gained 33 cents or 0.4% to $88.02 a barrel by 11:49 GMT. U.S. West Texas Intermediate (WTI) crude added 24 cents or 0.3% to $85.38.
Tensions in Ukraine increased after the Russian Federation massed troops near its borders, fuelling fears of supply disruption in Eastern Europe.
The U.S. State Department wants to protect its employees as well as their family members. It ordered family members of diplomats to leave the country.
Oil prices and risk factors
Unfortunately, energy markets are likely to be hit if tensions regarding Ukraine turn into conflict. Europe relies on the Russian Federation for about 35% of its natural gas. According to JPMorgan, tensions could trigger a “material spike” in oil prices.
Still, Russia said on Monday that it remained a reliable energy supplier to Europe despite problems.
Tensions are running high in the Middle East as well. On Monday, the United Arab Emirate intercepted and destroyed two Houthi ballistic missiles. The group wanted to attack the country, but UAE managed to neutralize the missiles fired by the group.
Barclays raised its average oil price forecasts by $5 a barrel for 2022, citing shrinking spare capacity as well as elevated geopolitical risks.
It raised its 2022 average price forecasts to $85 from $82 a barrel for Brent and WTI respectively.
WTI and Brent rose for a fifth week in a row last week, gaining about 2% to their highest since October 2014.
Oil prices gained more than 10% this year on the concerns regarding tightening supplies, apparently out of sync with global equities markets that are bruised from a massive sell-off triggered by concerns regarding tighter monetary policy around the world.
Besides, the oil market is tight, with OPEC+ struggling to reach its targeted monthly output increase of 400,000 barrels per day.