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Oil Prices Rise to Seven-Year High

Oil Prices Rise to Seven-Year High
Source: IADB

On Tuesday, the price of oil touched its highest level in more than seven years, as traders fretted that an attack on a Middle Eastern gasoline storage facility may disrupt supplies.

Three petroleum tankers were blown up in the United Arab Emirates after a suspected drone strike by Yemeni Houthi militants.

Three individuals were murdered in an incident near Abu Dhabi airport on Monday.

Airstrikes by a Saudi-led coalition hit the Yemini capital of Sanaa, killing as many as 20 people.

The rising price of oil is assumed to be due in part to rising expectations of a quick global economic recovery following the coronavirus epidemic, which would increase demand for the fossil fuel.

Fears of assaults on the oil-rich state, along with forecasts of a jump in demand, pushed prices to their highest level since October 2014.

Brent crude, the international benchmark for oil prices, increased by over 1% to $87.22 per barrel. The spike in price was much more pronounced in the United States, as West Texas Intermediate crude rose 1.3 percent to $84.89 per barrel.

Furthermore, there are already fears that rising oil prices may exacerbate the cost-of-living crunch.

“For the first time since 2014, traders are eyeing the $100 per barrel milestone for crude oil, with the perceived fading danger presented by Omicron to the global economy and supply restrictions and disruption driving the black stuff higher,” said AJ Bell’s investment director Russ Mould.

“A seven-year high in oil prices, combined with a continued, albeit below inflation, rise in UK incomes, has refocused attention on inflationary pressures and a cost-of-living issue,” he said.

Mr Mould’s remarks came after the Office for National Statistics reported that the cost of living in the UK was rising faster than wages, causing people to feel poorer.