Geopolitical risks exacerbate supply concerns Crude oil collectively closed higher at a new high in more than seven years

Crude oil futures closed at their highest level
since 2014 as concerns about Omicron receded and concerns about energy supplies heightened geopolitical tensions following the attack on Abu Dhabi's oil facilities.

West Texas Intermediate crude for February delivery on the New York Mercantile Exchange settled at $85.
43 a barrel, up $1.
61, or 1.
9 percent
.
ICE European Futures March Brent crude rose $1.
03, or 1.
2%, to settle at $
87.
51 a barrel.
West Texas Intermediate and Brent both settled at their highest levels since Oct.
13, 2014
, according to FactSet.

Michael Lynch, president of Strategic Energy and Economic Research, said: "The fact that the Houthis now have the ability to detonate explosives at Abu Dhabi oil facilities certainly doubles the pressure on the New York Mercantile Exchange
.
"

Iranian-backed Yemeni Houthi rebels claimed responsibility
for Monday's attack on oil facilities in Abu Dhabi.
The attack killed three people and caused a fire
at the international airport in the capital of the United Arab Emirates.
The UAE is the world's eighth-largest oil producer, and instability in the Gulf could stoke concerns
about supply shortages.

Louise Dixon, senior oil market analyst at RystadEnergy, said in a note on Tuesday: "The damage to the UAE's oil facilities in Abu Dhabi is not serious in itself, but it raises more questions
about supply disruptions in the region in 2022.
" The attack increases geopolitical risks in the region and could bode well for relations between
Iran and the United States.
A nuclear deal will not be on the table for the
foreseeable future.
That would mean Iranian crude out of the market, boosting demand
for similar grades from elsewhere.
”

Tyler Richey, co-editor of SevensReport Research, said the settlement of the major oil benchmark at multi-year highs underscored the bullish momentum in the market and allowed the path of least resistance to move significantly higher, with a new upward movement target for West Texas Intermediate ($105 per barrel).
"
"Omicron's fading concerns have never led to a significant weakening of economic lockdown demand in most major countries around the world, which, combined with a low global supply outlook for 2022, has reduced the size
of the expected surplus this year," he said.
This means that inventories that are currently below average will not recover
quickly in the coming quarters.
"

At the same time, Goldman Sachs raised its oil price forecast, setting a spot price target of $105 per barrel for Brent crude in 2023 and $96 per barrel in 2022
.

"We expect net inventories to decrease, but to continue into Q1'22, with a global surplus of 400,000 bpd (400,000 bpd), below seasonal levels
," Courvalin and team said.
By summer, OECD oil inventories will be at their lowest level since 2000, and OPEC and its partners will see a historic decline
in spare capacity.
"At an oil price level of $85/b, the oil market will remain at such a critical level that there is no adequate buffer against supply and demand fluctuations
until 2023," he said.

Goldman's call certainly helps oil, but the idea that some OPEC+ members, notably Angola and Nigeria, will not be able to meet their quotas, leaving the market in short supply for a longer period of time has earned a lot of trust
.
"

Oil prices continued to move higher after OPEC forecasted in its monthly report that global oil demand would grow by 4.
2 million bpd in 2022, with total global oil consumption expected to
be 100.
8 million bpd.
Separately, the U.
S.
Energy Information Administration's monthly report forecasts that oil production in the seven largest shale oil producing regions in the United States will increase by 104,000 b/d from January to 8.
54 million b/d in February, with the Permian Basin recording the largest
increase.

The U.
S.
Energy Information Administration will release its weekly U.
S.
oil supply report on Thursday, a day later than usual due to Martin Luther King Jr
.
holiday.

Among other exchange-traded energy products, gasoline rose 0.
5 percent to $2.
432 a gallon in March, up 5.
2 percent
last week.
Heating oil rose 2.
19 percent in February to $2.
674 a gallon, rising for 11 consecutive trading days, the longest gain since December 1989 and the highest near monthly close since September 2014
.
The February contract for natural gas futures rose 1.
85% to settle at $
4.
283 per million British heat.