Global oil prices hit the highest level in seven years and three months. It is the result of concerns about supply shortage as Yemen rebels attacked oil facilities in the United Arab Emirates, one of the major oil producers.
February West Texas Intermediate (WTI) closed at 85.43 dollars per barrel, up 1.9 percent from the previous day, on Tuesday (local time) in the New York Mercantile Exchange. It is the highest level since October 2014 and 13.6 percent higher than the end of last year.
Oil prices are being pushed up as demand is constant due to heating in winter and economic recovery while concerns about supply shortages are growing. Escalating military tensions between Russia and Ukraine are also destabilizing the oil supply from Russia. In addition, Yemen rebels’ attack on UAE oil facilities is adding more concerns about supply shortage.
Goldman Sachs predicted that oil reserves held by OECD member countries will drop to the lowest levels since 2000 by this summer. According to Reuters, a member of the Organization of the Petroleum Exporting Countries (OPEC) said that oil prices will continue to rise for the coming months and may exceed 100 dollars per barrel.
The Ministry of Trade, Industry and Energy held a meeting to review the oil market with members of major oil refineries and evaluate domestic demand and supply based on the recent rise of global oil prices.
As oil prices continue to skyrocket, concerns about inflation driven by energy prices are growing. As of December last year, LNG’s import price was 892.03 dollars per ton, which is 148.9 percent higher than a year ago. Furthermore, the South Korean government plans to raise electricity prices in April and October this year.
Hee-Chang Park email@example.com