Brent oil prices ballooned to a seven-year high, driven mainly the sustained demand and limited supplies in the top regional consumer across the globe.
- Futures in London for March settlement gained 92 cents to $87.40 a barrel on the ICE Futures Europe exchange at 12:06 p.m. London time, marking the highest level since October 2014.
- The surge is attributed to concerns over the impact of the COVID-19 Omicron variant on-demand, along with supply issues due to outages in Libya and North America. Geopolitical risks also remain amid a drone attack on UAE oil facilities.
- The rally may provide difficulties for top-consuming nations and central banks as they continue to address the inflationary uptick while seeking to support global growth. Data also indicate upbeat signals as air travel withstands the Omicron impact.
The strength of the physical market has been boosted by the ongoing tension in the Persian Gulf, which hosts some 40% of global seaborne oil.