Oil hits 7-year peak on political risks, supply crunch

Oil prices rose to a more than seven-year peak on Friday and recorded their sixth straight weekly gain as geopolitical turmoil exacerbated concerns over tight energy supply.

According to Reuters, Brent futures rose 69 cents to settle at $90.03 a barrel, after hitting $91.70, the highest level since October 2014.

U.S. crude closed 21 cents higher at $86.82 per barrel, after hitting a seven-year peak of $88.84 during the session.

Tight oil supplies pushed the six-month market structure for Brent into steep backwardation of $6.92 a barrel, the widest since 2013.

Backwardation exists when contracts for near-term delivery of oil are priced higher than those for later months, encouraging traders to release oil from storage to sell it promptly.

Major producers in the Organization of the Petroleum Exporting Countries (OPEC) and allies led by Russia, collectively known as OPEC+, have struggled to raise their production levels.

The market also reacted to attacks on United Arab Emirates by Yemen’s Houthi group.

Prices drew support from concerns over a possible military conflict in Ukraine that could disrupt energy markets, especially natural gas supply to Europe.