Oil prices rose for a fourth day on Jan. 19 after a fire on a pipeline from Iraq to Turkey briefly stopped flows, increasing concerns about an already tight short term supply outlook.
Brent crude futures rose 48 cents, or 0.6%, to $87.99 a barrel at 1245 GMT, adding to a 1.2% jump in the previous session. The benchmark contract touched $89.05, its highest since Oct. 13, 2014.
U.S. West Texas Intermediate (WTI) crude futures climbed 66 cents, or 0.8%, to $86.09 a barrel. WTI earlier jumped to $87.08, its highest since Oct. 9, 2014.
The explosion that set off the fire on the pipeline in the southeastern Turkish province of Kahramanmaras was caused by a falling power pylon, not an attack, a senior security source said.
The pipeline carries crude out of Iraq, the second-largest producer in OPEC, to the Turkish port of Ceyhan for export.
Analysts are forecasting tight oil supply in 2022, driven in part by demand holding up despite the spread of the Omicron coronavirus variant, with some predicting $100 a barrel.
Security concerns involving Russia, the world's second-largest oil producer, and the UAE, OPEC's third-largest producer, are adding to supply fears.
The International Energy Agency said on Jan. 19 that the oil market was due to flip into surplus in the first quarter of this year.
However, the agency warned commercial oil and fuel stocks in OECD countries were at their lowest levels in seven years and dents in supply could render the oil market in 2022 volatile.
Meanwhile, OPEC, Russia and other producers known as OPEC+, are already having difficulty hitting their monthly output increase target of 400,000 barrels per day.
"OPEC+ is falling short of hitting their production quotas and if geopolitical tensions continue to heat up, Brent crude might not need much of a push to get to $100 a barrel," OANDA analyst Edward Moya said.
OPEC officials have told Reuters that oil's rally may continue in the next few months due to recovering demand and limited capacity in OPEC+, and prices could top $100 a barrel.
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