London, (Business News Report) – Oil prices have risen above $90 a barrel for the first time since 2014, buoyed by supply shortages.
The escalation of political tensions in Europe and the Middle East and growing concern about further turmoil in a market already experiencing a tight supply pushed oil prices to this level.
Brent crude contracts jumped $1.80, or 2.3 percent, to $90.33 a barrel by 1615 GMT. This is the first time the global benchmark has breached the $90 level since October 2014.
US West Texas Intermediate crude contracts rose $2.1, or 2.46%, to $87.72 a barrel.
US President Joe Biden said he would consider imposing sanctions on President Vladimir Putin if Moscow invaded Ukraine. Western leaders ramped up military preparations and drew up plans to protect Europe from a potential energy supply crisis.
Concerns about the Middle East also escalated on Monday, when Yemen’s Iran-aligned Houthi movement launched a missile attack on a base in the United Arab Emirates.
Later in the day, Brent crude contracts ended the trading session up $1.76, or 2%, to record at a settlement of $89.96 a barrel, after it crossed the $90 level for the first time since October 2014.
Oil prices gave up some of their gains in post-settlement trading. They fell along with other high-risk assets, such as stocks, after investors interpreted the comments of the Chairman of the Board of Directors of the US Federal Reserve Jerome Powell at a news conference. He indicated a tough stance on expected interest rate increases.
The US Energy Information Administration (EIA) announced, on Wednesday, that US oil stocks rose by 2.4 million barrels last week, against expectations for a decrease of 700,000 barrels.
The crude stockpile in the US Petroleum Reserve decreased by 1.3 million barrels to 590.78 million barrels, dropping to its lowest level since November 2002, EIA said.
US gasoline stocks increased by 1.3 million barrels, to the highest level since February 2021, EIA added.
The EIA also said that the US net imports of crude oil last week fell by 695,000 barrels per day to 3.44 million barrels per day.
While market sources said that data from the American Petroleum Institute revealed on Tuesday that US crude stocks fell 872,000 barrels. This sheds light on the shortage of supply and the balance of demand.
