Oil at Its Highest Level Since 2014

Oil prices rose on Wednesday for the fourth consecutive day after a pipeline fire from Iraq to Turkey briefly halted supplies, raising concerns about an already-existing outlook for near-term tightness.

Brent crude futures rose 48 cents, or 0.6 percent, to $ 87.99 a barrel by 1245 GMT, after rising 1.2 percent in the previous session. The European benchmark touched $89.05, the highest level since October 13, 2014.

US West Texas Intermediate crude futures rose 66 cents, or 0.8 percent, to $86.09 a barrel. West Texas Intermediate crude earlier climbed to a peak of $87.08, its highest level since Oct. 9, 2014.

A senior security source said the explosion that set the pipeline on fire in southeastern Turkey’s Kahramanmaras province was caused by a downed electricity pole, not an attack.

The pipeline transports crude from Iraq, the second-largest producer in the Organization of the Petroleum Exporting Countries (OPEC), to the Turkish port of Ceyhan for export.

This comes at a time when analysts expect limited supplies of oil in 2022, which is due to reasons, including an increase in demand, much more than what was expected in light of the highly contagious mutated strain of the Coronavirus, as some refer to the return of the oil price to $ 100 a barrel.

Exacerbating supply concerns are geopolitical problems in Russia, the world’s second-largest oil producer, and the United Arab Emirates, OPEC’s third-largest oil producer.

The International Energy Agency said on Wednesday that the market is expected to turn surplus in the first quarter of this year.

However, the agency warned that commercial oil and fuel stocks in OECD countries are at their lowest levels in seven years and that lower supplies could cause the oil market to fluctuate in 2022.

Meanwhile, the Organization of the Petroleum Exporting Countries, Russia, and other producing countries, which together form a bloc known as OPEC +, are already facing difficulty in reaching the targeted monthly production increase of 400,000 barrels per day.

OPEC officials told Reuters that the rise of oil may continue over the next few months due to the recovery in demand and limited production capacity of OPEC + members and that prices may exceed $100 a barrel.