Brent oil hits highest level in more than seven years

HONG KONG: Brent crude prices hit their highest level in more than seven years on Tuesday on growing demand optimism, easing concerns about the Omicron Covid variant and geopolitical tensions.

The contract hit $86.84 in Asian trade, a level not seen since late October 2014.

Brent crude futures rose 85 cents, or 1%, to $87.33 a barrel by 0525 GMT, after earlier hitting a peak of $87.55, their highest since Oct. 29, 2014.

U.S. West Texas Intermediate (WTI) crude futures jumped $1.13, or 1.4%, from Friday's settlement to a more than two-month high of $84.95 a barrel. Trade on Monday was subdued as it was a U.S. public holiday.

The latest bump comes after Yemen's Houthi rebels claimed attacks in Abu Dhabi that triggered a fuel tank blast killing three people Monday, adding that civilians and foreign firms in the United Arab Emirates should avoid "vital installations".

The news fuelled concerns about supplies from the crude-rich region.

UAE oil firm ADNOC said it had activated business continuity plans to ensure uninterrupted supply of products to its local and international customers after an incident at its Mussafah fuel depot. 

CommSec analysts said oil prices also were being supported by colder winter temperatures in the northern hemisphere which were driving up demand for heating fuels.

"Analyst forecasts expect demand to outstrip supply this year as the world opens up from 2 years of lockdowns and resumes a more normal trajectory for demand," said Ash Glover at CMC Markets.