Oil extended gains to seven-year highs above $90 a barrel on Thursday

The signs that the U.S. Federal Reserve would tighten monetary policies were outweighed by the Ukraine crisis.

Brent crude futures rose 89 cents or 1% to $90.85 per barrel by 1217 GMT. U.S. West Texas Intermediate crude futures rose 87cs or 1% to $88.22

On Wednesday, crude oil prices surged. Brent rose above $90 per barrel for the first time in seven years due to tensions between Russia & the West. Russia, the second-largest oil producer in the world, and the West have been at odds over Ukraine, causing fears about disruption to Europe’s energy supply.

The U.S. Federal Reserve announced Wednesday that it will likely raise interest rates in March. It also plans to stop bond purchases in March in its fight to control inflation. Both contracts fell in early trading.

After the announcement, the U.S. Dollar climbed making oil more expensive for those who use other currencies.

Commerzbank stated that the Ukraine crisis is preventing a more severe price drop, and there are still concerns about Russian oil and gas supplies being hampered in case of a military escalation.

The February 2nd meeting of the Organization of the Petroleum Exporting Countries, (OPEC), and its allies led Russia is attracting market attention. This group is known as OPEC+.

According to OPEC+ sources, the group will likely stick to its March oil production target increase.

OPEC+ has increased its monthly output target by 400,000 barrels per hour (bpd), as it tries to reverse record production cuts in 2020.

The group has experienced capacity constraints, which have stopped some members from producing at their quotas.

Nevertheless, some supply concerns were eased by an increase in gasoline and crude oil inventories in the United States.

The Energy Information Administration (EIA), Wednesday’s report said that crude inventories increased by 2.4 million barrels. This is compared to the 728,000 barrels that analysts expected in a Reuters poll.

The largest increase in gasoline stockpiles since February 2021 was 1.3 million barrels.

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