Oil Up Over Mideast Tensions, Tight Supply -Breaking
By Gina Lee
Investing.com – Oil was up on Tuesday morning in Asia, reacting to a that were attributed to Yemen’s Houthi group.
After hitting an all-time high of $87.00 earlier in the session, which was the highest level since October 30, 2014 (11:16 ET/4:16 GMT), the price rose 0.99% to $87.34 at 11:16PM ET (8:16 AM GMT). The price of oil rose 1.34%, to $84.42, just 0.1% from the $84.78 high two months earlier. The holiday in the U.S. caused trade to slow down on Monday.
The latest “geopolitical tension added to ongoing signs of tightness across the market,” ANZ Research analysts said in a note.
The attacks on the outskirts of the UAE’s capital city of Abu Dhabi caused an explosion and fire as well as killing three people. There were concerns about supply disruptions and escalated hostilities between an Iran-aligned coalition and a Saudi-led alliance.
Houthi rebels warned about more possible attacks on UAE facilities. UAE replied by saying that it would “respond” to such terrorist attacks.
Following an incident at Mussafah’s fuel depot, the Abu Dhabi National Oil Company has activated business continuity planning to assure uninterrupted supply for both domestic and international customers.
According to CommSec analysts, colder temperatures in northern hemisphere are supporting oil prices and driving up demand.
Others analysts said that the tight supply/demand balance will not change, and some Organization of the Petroleum Exporting Countries (OPEC+), producers are having trouble pumping at the maximum capacity. At its Jan. 4th meeting, the cartel agreed that it would continue to increase the monthly production by 400,000 barrels.
Craig Erlam, OANDA analyst at OANDA told Reuters that the outlook should remain positive for oil. He also suggested increasing talk about triple-figure price increases.
Investors now await .
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