By Gina Lee
Investing.com – Oil was up on Monday morning in Asia, with geopolitical tensions in Eastern Europe and the Middle East fanning concerns about an already-tight supply outlook. The Organization of the Petroleum Exporting Countries and allies (OPEC+) also continues to struggle to raise its output.
Brent oil futures jumped 0.83% to $87.80 by 10:35 PM ET (3:35 AM GMT) and WTI futuresrose 0.81% to $85.83. The black liquid is up more than 10% so far in 2022 over continuing concerns about a tightening market.
"Investors remained bullish due to geopolitical risk between Russian and Ukraine as well as in the Middle East while OPEC+ continued to fail to reach its output target," Fujitomi Securities Co. Ltd. chief analyst Kazuhiko Saito told Reuters.
Any armed conflict over Ukraine could lead to supply disruption in Eastern Europe. In its latest move, the U.S. on Sunday ordered the departure of eligible family members of staff from its embassy in Ukraine and said all its citizens should consider leaving the country due to the increased risk of armed conflict.
Russia faces severe economic sanctions if it installs a puppet regime in Ukraine, British Deputy Prime Minister Dominic Raab warned on Sunday, in response to reports that Russia aims to place a pro-Russian leader in power in Ukraine.
Meanwhile, the United Arab Emirates grounded most private drones and light sports aircraft used for recreational purposes for a month starting Saturday said the country’s Interior Ministry. The ban follows the previous week’s drone attack on the country by Yemen's Houthis.
On the supply side, OPEC+ continues a struggle to meet its monthly output increase target of 400,000 barrels per day (bpd). The cartel’s compliance with its oil production cuts rose to about 122% in December 2021, according to Reuters, a sign that some of its members continue to struggle to raise their output.
In the U.S., petroleum inventories have continued to fall over the last month, while energy firms cut oil rigs this week for the first time in 13 weeks. "An expectation for higher heating oil demand in the U.S. amid cold weather also added to pressure," said Fujitomi Securities’ Saito.