Title: Oil prices climb more than 1% to 7-year highs on supply disruption fears
Feb 14, 2022 12:20AM ET
Oil prices hit their highest level in more than seven years on Monday on fears that a possible Russian invasion of Ukraine could trigger sanctions by the United States and Europe that would disrupt exports from the world's biggest producer in an already tight market.
Brent crude futures were at $95.61 a barrel at 0506 GMT, up to $1.17, or 1.2 percent, after earlier hitting a high of $96.16, the highest since October 2014. West Texas Intermediate crude was up $1.41, or 1.5 percent, at $94.51 a barrel, near its peak of $94.94, the highest since September 2014.
Statements from the United States about an imminent Russian attack on Ukraine rattled global financial markets.
The United States said on Sunday that Russia could invade Ukraine at any time and create a surprise pretext for an attack if needed.
The tensions come as the Organization of Petroleum Exporting Countries and its allies, a group known as OPEC+, struggle to increase production by 400,000 barrels a day by March despite monthly pledges to do so.
According to the International Energy Agency, the gap between OPEC+ production and its target widened to 900,000 BPD in January, while JP Morgan put the gap for OPEC alone at 1.2 million BPD.
The bank added that a super-cycle was in full swing, with oil prices rising above $125 a barrel on the back of a rising risk premium for excess capacity.
Tina Teng, an analyst at CMC Markets, said oversupply was limited and oil demand had outpaced output growth as economies recovered from the worst of the coronavirus pandemic.
Investors are also watching the talks between the United States and Iran to revive the 2015 nuclear agreement.