Oil prices will remain extremely sensitive to reports regarding the situation in Ukraine
< p>Oil prices on Monday, February 14, reached their highest level in more than seven years. Oil is rising in price due to fears that a possible Russian invasion of Ukraine could lead to US and European sanctions that would disrupt exports from the world's largest producer in an already tight market.
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Brent futures rose 0.5% to $94.91 a barrel after previously peaking at $96.16, the highest since October 2014. WTI crude rose 0.7% to $93.78, hitting $94.94 earlier, the highest since September 2014.
Comments from the United States about Russia's impending attack on Ukraine stirred up global financial markets. Russia could invade Ukraine at any time and could provide an unexpected pretext for an attack, the United States said Sunday.
As OANDA analyst Edward Moya noted, in the event of a military invasion, Brent oil will easily rise above $100.
«Oil prices will remain extremely volatile and sensitive to additional reports regarding the situation in Ukraine& #187;, — he added.
Tensions arise as the Organization of the Petroleum Exporting Countries (OPEC) and its allies, the group known as OPEC+, struggle to increase output despite monthly pledges to increase production by 400,000 bpd until March.
The International Energy Agency said the gap between OPEC+ production and its target widened to 900,000 bpd in January, while JP Morgan said that the gap for OPEC alone is 1.2 million bpd.
Note, as U.S. oil rises to $100 a barrel, producers in some of the high-priced shale basins are buying property and adding rigs. Work was stopped when prices dropped at the start of the pandemic two years ago.