(Bloomberg) — Oil fell from a seven-year high after the U.S. Federal Reserve signaled that it would soon start raising interest rates to quell inflation, denting investors’ appetite for risk assets including commodities.

West Texas Intermediate dropped after reaching its highest point since October 2014 when it reached $90. This surge was caused by inventories at Cushing, the U.S. storage center at key point of the country’s economy, falling again last week and reaching their lowest levels in over a decade.

Due to concern about Russia invading Ukraine, Crude traders have been monitoring events at the Ukrainian border. Russia has already positioned thousands of troops along its borders and could disrupt energy supply. Amid the high-stakes standoff, the U.S. has handed Russia its written response to Moscow’s security demands.

Due to the continuing recovery in energy consumption following the outbreak of coronavirus, oil has seen a rally during the first week of 2022. This sustained increase has increased inflationary pressures around the world. In March, Fed officials indicated they would start increasing borrowing costs. The Fed’s actions helped strengthen the dollar and weighed on raw materials.

“What we are seeing today is probably just a technical move, some profit-taking after the recent gains,” said Howie Lee, an economist at Oversea-Chinese Banking Corp. in Singapore.

Oil’s market structure is still flashing signs of tighter supplies, with backwardation — a bullish indicator marked by near-term contracts above those further out — widening significantly. Brent’s prompt timespread was at $1.19 a barrel in backwardation, up from 41 cents at the start of the month.

“The momentum still looks strong,” said OCBC’s Lee, adding that OPEC+ has faced difficulties in meeting scheduled output increases. “Supply challenges are the drivers behind this surge in oil prices and the tightness in the market will persist in the near term, maybe this quarter. I see little reason why oil won’t go to $100.”

National crude oil supplies increased for the second week, while gasoline inventories rose nearly one year ago. However, gasoline stocks remain low because U.S. Gulf Coast refiners have been undergoing an extended maintenance season. Summer driving season is forecast to see a rebound in demand.

When the Organization of Petroleum Exporting Countries meets next week on Feb. 2, they will allow Russia and other allied countries to have a voice. The coalition will probably rubber-stamp a hike of 400,000 barrels a day for March, according to officials from about half of the group’s members.

©2022 Bloomberg L.P.