Oil prices rise on geopolitical tensions, OPEC struggles

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Oil prices rise on geopolitical tensions, OPEC struggles

A maze of crude oil pipes and valves is pictured at the Strategic Petroleum Reserve in Freeport, Texas, June 9, 2016 in the U.S. TOKYO, January 24, Reuters -- Oil prices jumped on Monday after geopolitical tensions in Eastern Europe and the Middle East heightened concerns about an already tight supply outlook, while OPEC and its allies struggled to raise their output.

Brent crude futures increased 87 cents, or 1.0%, to $88.76 a barrel by 0100 GMT, reversing a 0.6% loss on Friday.

U.S. West Texas Intermediate WTI crude futures rose 86 cents, or 1.0%, to $86.00 a barrel, having fallen 0.5% on Friday.

Both crude benchmarks rose for the fifth week in a row last week, gaining around 2% to reach their highest since October 2014. The price of the goods has gone up more than 10% this year due to concerns over tightening supplies.

According to Kazuhiko Saito, chief analyst at Fujitomi Securities Co Ltd., investors remained bullish due to the geopolitical risk between Russian and Ukraine and the Middle East.

Pressure was added to by the expectation for higher heating oil demand in the United States due to cold weather.

The United States ordered the departure of eligible family members of staff from its embassy in Ukraine and said that all citizens should consider leaving due to the threat of military action from Russia, fuelling fears of supply disruption in eastern Europe. A senior British government minister said on Sunday that the Kremlin had accused the Kremlin of trying to put a pro-Russian leader in power in Ukraine and threatened economic sanctions if it installs a puppet regime there. The United Arab Emirates UAE has suspended most private drones and light sports aircraft used for recreational purposes for a month starting Saturday, after a deadly drone attack last week by Yemen's Houthis in the Gulf country, according to the Interior Ministry. The Organization of the Petroleum Exporting Countries OPEC with Russia and other producers is struggling to hit its monthly output increase target of 400,000 barrels per day bpm, according to the monthly output increase target of the Organization of the Petroleum Exporting Countries OPEC with Russia and other producers.

Two producers told Reuters that the OPEC's compliance with long-installed oil production cuts rose to 122% in December, a rise that some members are struggling to raise their output. In the United States, petroleum inventories have continued to slide over the last month, while energy firms cut oil rigs this week for the first time in 13 weeks. The cold weather will boost heating demand over the next few weeks, according to analysts.