# Oil prices hover around 2014 highs, supported by supply concerns
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2022-01-20
Category: NEWS
Category URL: https://financedigest.com/category/news
Meta Title: Oil prices steady amid strong demand and supply disruptions
Meta Description: Oil prices remained stable as demand stays robust and short-term supply disruptions push prices near levels not seen since 2014.
URL: https://financedigest.com/oil-prices-hover-around-2014-highs-supported-by-supply-concernshtml

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By Naveen Thukral and Roslan Khasawneh

SINGAPORE (Reuters) -Oil steadied on Thursday, clawing back losses earlier in the session, as strong demand and short-term supply disruptions continue to support prices close to their highest levels since late 2014.

Brent crude futures fell 17 cents, or 0.2%, to $88.27 a barrel, as of 0418 GMT, having dropped more than $1 earlier in the session. The global benchmark touched $89.17 a barrel on Wednesday, its highest since October 2014.

U.S. West Texas Intermediate (WTI) crude futures were up 7 cents, or 0.1%, to stand at $87.03 a barrel, having also shed nearly $1 earlier. WTI climbed to as much as $87.91 on Wednesday, the highest since October 2014.

The International Energy Agency said global [oil demand](https://www.financedigest.com/oil-prices-rebound-after-opec-upgrades-china-demand-outlook.html "Oil prices rebound after OPEC upgrades China demand outlook") is on track to hit pre-pandemic levels,” analysts at ANZ bank said in a note.

Shorter-term supply [disruptions are also helping tighten markets](https://www.financedigest.com/unprecedented-constructive-disruption-to-drive-the-h1n1-vaccines-market.html "Unprecedented, constructive disruption to drive the H1N1 Vaccines Market"). Brent [crude rallied sharply after reports a key oil](https://www.financedigest.com/oil-dips-after-fed-comments-us-crude-stock-build.html "Oil dips after Fed comments, US crude stock build") pipeline running from Iraq to Turkey was knocked out by an explosion.

However, the flow of [crude oil](https://www.financedigest.com/oil-near-flat-as-us-crude-stock-draw-contends-with-economic-concerns.html "Oil near flat as US crude stock draw contends with economic concerns") through the Kirkuk-Ceyhan pipeline has resumed, after it was halted on Tuesday due to a blast near the pipeline in the southeastern Turkish province of Kahramanmaras, officials said on Wednesday.

Supply [concerns have mounted](https://www.financedigest.com/shares-rise-but-concern-mounts-over-inflation-flare-up.html "Shares rise, but concern mounts over inflation flare-up") this week after Yemen’s Houthi group attacked the United Arab Emirates, the third-largest producer in the Organization of the Petroleum Exporting Countries (OPEC). Meanwhile Russia, the world’s second-largest oil producer, has built up a large troop presence near Ukraine’s border, [stoking fears](https://www.financedigest.com/britains-market-rout-stokes-contagion-fears-around-the-globe.html "Britain’s market rout stokes contagion fears around the globe") of invasion and subsequent supply uncertainties.

Underpinning [oil prices](https://www.financedigest.com/oil-ticks-up-as-u-s-inflation-cools-but-prices-set-for-monthly-drop.html "Oil ticks up as U.S. inflation cools, but prices set for monthly drop") is the broad post-coronavirus pandemic recovery in demand for fuel.

OPEC officials and analysts say that an oil rally may continue in the next few months, and [prices could top](https://www.financedigest.com/4-for-the-price-of-1-what-you-can-buy-in-the-uks-top-northern-cities-for-the-price-of-a-london-pad.html "4 for the price of 1: What you can buy in the UK’s top northern cities for the price of a London pad") $100 a barrel as demand shrugs of the spread of the Omicron COVID-19 variant.

OPEC+, which groups the cartel with Russia and other producers, is struggling to hit a monthly [output increase target](https://www.financedigest.com/toyotas-july-global-vehicle-output-drops-again-puts-annual-target-in-doubt.html "Toyota’s July global vehicle output drops again, puts annual target in doubt") of 400,000 barrels per day (bpd).

U.S. crude and gasoline stocks rose while distillate inventories fell last week, according to [market sources](https://www.financedigest.com/italy-open-to-selling-down-mps-stake-on-market-if-terms-buyers-are-right-sources.html "Italy open to selling down MPS stake on market if terms, buyers are right – sources") citing American Petroleum Institute figures on Wednesday.

Crude stocks rose by 1.4 million barrels for the [week ended](https://www.financedigest.com/european-shares-end-five-day-losing-streak-still-down-for-the-week.html "European shares end five-day losing streak, still down for the week") Jan. 14. Gasoline inventories rose by 3.5 million barrels while distillate [stocks](https://www.financedigest.com/aston-martin-stock-soars-after-295-million-on-geely-investment.html "Aston Martin stock soars after 5 million on Geely investment") fell by 1.2 million barrels, according to the sources, who spoke on condition of anonymity.

(Reporting by Naveen Thukral and Roslan Khasawneh; Editing by Kenneth Maxwell)


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