Amid the growing tension over Ukraine that threatens to disrupt energy supplies and the signs of sustained global demand, oil markets continued the positive momentum from last week and rallied again on Monday.
The gauge that tracks US crude, West Texas Intermediate, has climbed to trade at $88.01 a barrel while the benchmark for two-thirds of the world’s oil, Brent, rose to $91.24 a barrel and is set for its three decades’ best January performance.
As geopolitical tension continued to rise in Eastern Europe in the past few weeks and in light of the Pentagon’s placing of 8,500 US troops on high alert after thousands of Russian troops were stationed along the border with Ukraine, crude has remained buoyant.
In an additional sign of a potential escalation that could derail the flow of global energy supplies, Russia further boosted its troop presence at the weekend.
According to Avtar Sandu’s, senior manager for commodities at Singapore-based broker Phillip Nova, note to the investors, the rise in crude futures comes after the US Senate has passed an agreement by US politicians to ensure legislation on Russian sanctions, hence racking up tension on Ukraine.
Sandu stressed that due to the continuous saber-rattling over the persistent Russia-Ukraine standoff, the world oil markets are widely expected to remain prone to geopolitics in 2022.
The Monday rally, which builds on six consecutive weekly gains, is adding to crude prices that have already climbed more than 10% this year as the recovering global economies pushed the demand higher.
Oil price, which rose more than 67%, is also shored up by the restrained production to support the energy market from Opec+, which stuck to its plan to increase production by 400,000 bpd for February, but the 23-member group – led by Saudi Arabia and Russia – is to meet on February 2 to decide future production limits.
Be the first to comment