Oil hits seven-year highs as rally extends to a seventh week

Extending their rally into a seventh week, global crude oil prices surged to seven-year highs on worries about supply disruptions fueled by frigid US weather and ongoing political turmoil among major world producers. In their longest rally since October, Brent crude rose 3.6 per cent during the week to settle at 93.27 dollars a barrel.

US crude jumped 6.3 percent to 92.31 dollars a barrel after trading as high as 93.17 dollars, its highest since September 2014. Crude prices, which have already rallied about 20 percent so far this year, are likely to surpass 100 dollars per barrel due to strong global demand.

The market’s surge accelerated as buyers piled into crude contracts due to expectations that world suppliers will continue to struggle to meet demand. US jobs figures were also surprisingly strong in January, despite the presence of the Omicron variant.

Winter storms bringing icy conditions in the US, particularly in Texas, also fueled supply fears as extreme cold could cause production to shut temporarily, similar to what happened in the state a year ago.

Oil markets have also gained support from geopolitical risks as major oil producer Russia has amassed thousands of troops on Ukraine’s border, and is accusing the US and its allies of fanning tensions.