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International oil prices are trading close to a seven-year high

Oil prices traded within a marked distance from the highest in seven years on Monday, threatening to drive global inflation further up as supply remained limited and fears of another pandemic-induced slowdown in demand eased.

Brent, the international benchmark, has risen more than 10 percent in the first two weeks of the year to as much as $ 86.71 per barrel, surpassing last October's high, to approach levels not seen since 2014, when oil peaked at $ 115 .

The US oil benchmark West Texas Intermediate has risen more than 12 percent since the beginning of the year to a maximum of $ 84.78, just below last year's peak. Some analysts predict that the raw benchmarks will trade at more than $ 100 per share. barrel again this year unless there is a significant increase in supply.

"This is such a dangerous time right now in the oil market," said Helima Croft, Head of Global Commodity Strategy at RBC Capital Markets. “We are in the oil red zone too [US] Chairman [Joe] Biden, who is definitely preparing to ask Opec for more barrels. "

US consumer price growth rose 7 percent year-on-year in December, the fastest pace since 1982, following a 6-month recovery in energy markets that has pushed up living costs around the world.

The White House has called on the world's leading oil producers to increase production faster to help control inflation. But Opec and its allies have stuck to a plan agreed last July to gradually replace the production cut at the start of the pandemic by just 400,000 barrels a day each month.

The strategy has helped oil prices track higher since August, and recovering quickly after the rapid spread of the Omicron coronavirus variant in November led to a sale.

However, not all members of the Opec + group - which includes producers such as Saudi Arabia and Iraq and allied countries such as Russia and Kazakhstan - have been able to achieve their monthly targets, which means that the cartel has increased production by slightly less than its monthly goals. , analysts said.

In Europe - where natural gas is traded at historic levels due to high demand, low storage and tight supplies from Russia - fears of a possible Russian invasion of Ukraine are increasing uncertainty in energy markets.

"Although there is no supply interruption, [those] tensions are going to push on [oil] prices to potentially $ 100 per barrel, ”Croft said.

Bjarne Schieldrop, head of commodity analysts at the Swedish financial group SEB, said it would be up to overcapacity producers, such as Saudi Arabia, to act if they wanted to prevent prices from rising even higher.

"Fighting supply from Angola, Nigeria and Libya, coupled with unusually high natural gas prices and the tight global diesel market, are natural bullish forces for slightly sweet crude oil," he said.

"Against this background, we may see counter-action from them [Opec+] members left with spare capacity, even if it means a breach of their individual ceilings to prevent the oil price from shooting above $ 100 per. barrel."

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