Geopolitical tensions have reappeared, and oil is approaching its highest level since 2014

On Monday (January 17), U.
S.
oil rose 0.
52% to close at $83.
73 / barrel
.
Oil prices
have been boosted by lingering fears of a possible Russian attack on Ukraine, as Yemen's Houthis say they have launched drone strikes on the UAE.
At the same time, investors are betting that global supply will remain tight, keeping oil prices higher
.

Frenzied oil buying has pushed some grades of crude to multi-year highs, driven by supply disruptions and signs that the Omicron variant won't wreak havoc on fuel demand as feared, suggesting that Brent's rally could continue for some time
, traders said.
Since the beginning of 2022, money has continued to pour into the crude oil market, and nearly 500,000 new contracts
have been added.
This equates to nearly 500 million barrels of crude oil, indicating that there was a lot of liquidity volatility
in the crude oil market at the beginning of the new year.

Louise Dickson, senior oil market analyst at Rystad Energy, said the oil price upturn had continued into the third week of January and the drivers behind the optimism had been tightening
since 2022.
The mild impact of omicron has raised expectations for oil demand this year, while lower production, especially from OPEC+ countries, has led to tighter supply
.

OPEC+ is gradually rolling out the production cuts put in place when demand collapsed in 2020
.
According to the Libyan National Oil Company, the country's total oil production has recovered to 1.
2 million b/d
.
Libya produced about 900,000 b/d
of oil last week due to disruptions in western oil fields.
But many smaller producers have been unable to increase supply, while others have been wary of producing too much oil in case the pandemic hits their economies
again.

Toshitaka Tazawa, an analyst at Fujitomi Securities, said: "Bullish sentiment continues, with the OPEC+ alliance of the Organization of the Petroleum Exporting Countries (OPEC) and allies not providing enough supply to meet strong global demand
.
”

Mueller, head of Asia at Victor Group, the world's largest independent oil trader, said on Sunday that crude prices, which have risen more than 10 percent this year, could rise even more
due to tight supplies.
These prices are reasonable, and a strong spot premium is very reasonable
.
This is a bullish pattern where short-term futures are more expensive
than forward futures.
The current state of natural gas is a reminder that people will avoid buying expensive energy
at some point.
The question is to what extent it affects the oil market
.

U.
S.
officials on Friday expressed concern that Russia was preparing to launch an attack
on Ukraine after diplomatic efforts failed.
Russia says the dialogue continues, but has reached a dead end
.
Russia has tried to persuade the West to ban Ukraine from joining NATO and halt decades of expansion in Europe, but the United States has called the demands "unworkable.
"