Oil prices climbed higher on Tuesday after hovering near seven-year highs hit last week as investors prices in tight supplies with a limited production hike by major oil producers and a strong post-pandemic recovery in fuel demand.
U.S. WTI futures are up by 0.24% to $88.36 per barrel while Brent is up by 0.24% to $89.47 per barrel.
In a statement released alongside the Treasury’s quarterly borrowing estimates, Assistant Secretary for Economic Policy Ben Harris said he expects energy prices to stabilize in 2022, but geopolitical instability could push prices higher.
“The market is maintaining a bullish tone on expectations that supply tightness will continue as demand is picking up, with receding fears over spreading Omicron coronavirus variant,” said Hiroyuki Kikukawa, general manager of research at Nissan, as reported by Reuters.
“All eyes are on OPEC+ decision as well as development of the conflict between Russia and the West over Ukraine,” he said, predicting WTI could reach $90 a barrel soon.