International oil prices trade close to seven-year high

International oil prices trade close to seven-year high

Oil prices traded within striking distance of a seven-year high on Monday, threatening to drive global inflation up further as supply remained constrained and fears of another pandemic-induced slowdown in demand faded.

Brent, the international benchmark, has climbed more than 10 per cent in the first two weeks of the year to as much as $86.71 a barrel, exceeding last October’s high, to approach levels not seen since 2014 when oil topped $115.

US oil benchmark West Texas Intermediate has risen more than 12 per cent since the start of year to a high of $84.78, just under last year’s peak. Some analysts are forecasting that the crude benchmarks will trade at more than $100 a barrel again this year unless there is a significant increase in supply.

“This is such a perilous 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 for [US] President [Joe] Biden who is absolutely preparing to ask Opec for more barrels.”

US consumer price growth increased 7 per cent year on year in December, the fastest pace since 1982, after a six-month rally in energy markets that has pushed up the