SULAIMANI (ESTA) — Oil prices rose more than $1 on Tuesday to a more than seven-year high on worries about possible supply disruptions after Yemen’s Houthi group attacked the United Arab Emirates.
Brent crude futures rose 81 cents to $87.29 a barrel by 0527 GMT, after earlier hitting a peak of $87.55, their highest since Oct. 29, 2014.
U.S. West Texas Intermediate (WTI) crude futures jumped $1.08 from Friday’s settlement to a three-month high of 84.90 a barrel.
The “new geopolitical tension added to ongoing signs of tightness across the market,” Reuters cited ANZ Research analyst as saying.
After launching drone and missile strikes which set off explosions in fuel trucks and killed three people, the Houthi movement warned it could target more facilities, while the UAE said it reserved the right to “respond to these terrorist attacks”.
UAE oil firm ADNOC said it had activated business continuity plans to ensure uninterrupted supply of products to its local and international customers after an incident at its Mussafah fuel depot, according to Reuters.
The tight supply-demand balance is unlikely to ease, analysts said, as some producers within the Organization of the Petroleum Exporting Countries are struggling to pump at their allowed capacities, due to underinvestment and outages, under an agreement with Russia and allies to add 400,000 barrels per day each month.
