Oil breaks above $90 a barrel for first time in seven years

Oil breaks above $90 a barrel for first time in seven years

On Wednesday, oil touched $90 a barrel for the first time in seven years, supported by tight supply and rising political tensions in Europe and the Middle East that raised concerns about further disruption in an already tight market.

The price of crude went up $1.67, or 1.9%, to $89.87 by 10:40 a.m. EST 1540 GMT, the first time the global benchmark has broken that level since October 2014. U.S. West Texas Intermediate WTI crude was up $1.69, or 2%, to $87.28.

U.S. President Joe Biden said on Tuesday that he would consider personal sanctions against President Vladimir Putin if Russia invades Ukraine. On Monday, Yemen's Houthi movement launched a missile attack on a United Arab Emirates base.

Stephen Brennock, of the oil broker PVM, said that anxiety over potential supply disruptions in the Middle East and Russia is providing bullish fodder for the oil market.

The tensions have raised concerns about various factors that contribute to an already tight market. The United States is more than a million barrels short of its record level of daily output, and OPEC is having difficulty meeting its monthly production targets as it restores supply to markets after drastic cuts in 2020.

The Organization of the Petroleum Exporting Countries and allies, known as OPEC, meets on February 2 to discuss another output increase.

In the last week, crude stocks in the United States went up by 2.4 million barrels, against expectations for a modest decline in stocks. The gasoline inventories rose to their highest level in almost a year, a needed salve for the market.

The Fed is expected to announce plans to raise interest rates in March as it focuses on fighting inflation.