TOKYO- Oil prices jumped on Monday as geopolitical tensions in Eastern Europe and the Middle East heightened concerns about an already tight supply outlook, while OPEC and its allies continued to struggle to raise their output.
Brent crude futures rose 87 cents, or 1.0 percent, to $88.76 a barrel, reversing a 0.6 percent loss on Friday.
US West Texas Intermediate (WTI) crude futures gained 86 cents, or 1.0 percent, to $86.00 a barrel, having fallen 0.5 percent on Friday.
Both crude benchmarks rose for a fifth week in a row last week, gaining around 2 percent to hit their highest since October 2014. Prices are up more than 10 percent so far this year already on the concerns over tightening supplies.
“Investors remained bullish due to geopolitical risk between Russian and Ukraine as well as in the Middle East while OPEC+ continued to fail to reach its output target,” said Kazuhiko Saito, chief analyst at Fujitomi Securities Co Ltd.
“An expectation for higher heating oil demand in the United States amid cold weather also added to pressure,” he said.
Fuelling fears of supply disruption in Eastern Europe, the United States on Sunday said it was ordering the departure of eligible family members of staff from its embassy in Ukraine and said all citizens should consider leaving due to the threat of military action from Russia.
The latter will face severe economic sanctions if it installs a puppet regime in Ukraine, a senior British government minister said on Sunday, after Britain accused the Kremlin of seeking to place a pro-Russian leader in power there.
In the Middle East, the United Arab Emirates (UAE) has grounded most private drones and light sports aircraft used for recreational purposes for a month starting Saturday, the Interior Ministry said, following a deadly drone attack last week by Yemen’s Houthis on the Gulf country.
