WTI crude futures traded around $85 per barrel on Tuesday, nearing a multi-year high of $85.41 reached in October 2021 as the bull run in oil prices showed no signs of slowing down. Oil prices continued to trend higher amid concerns over tightness in the oil market, with investors shrugging off a potential hit to fuel demand from the omicron variant.
Fears about possible supply disruptions were also stoked after Yemen’s Houthi group attacked the United Arab Emirates, escalating hostilities between the Iran-aligned group and a Saudi Arabian-led coalition. Moreover, oil prices rallied even after China recently agreed with the US to release crude oil from its strategic stockpiles around the Lunar New Year, in a bid by major consumers to lower energy prices. Analysts said supply tightness is unlikely to ease as some OPEC+ member countries are struggling to pump at their allowed capacities due to underinvestment and outages.