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Oil prices hit 7-year highs as tight supply bites

Oil prices climbed to their highest level since 2014 as possible supply disruptions due to attacks in the Mideast Gulf added to a tight supply outlook. Brent crude rose $0.88 or 1%, while U.S. West Texas Intermediate crude jumped 1.5% or $1.23. Both benchmarks were highest since October 2014. 

After Yemen’s Houthi group attacked the UAE, hostilities between the Iran-aligned group and a Saudi Arabian- led coalition have caused supply concerns to arise. The Houthi group warned it could target more facilities and the UAE said it reserved the right to “respond to these terrorist attacks.” UAE oil firm ADNOC activated business continuity plans to ensure an uninterrupted supply to its customers. Rising tensions between Russia and Ukraine have also added to geopolitical price premiums. Opec will release its January oil market report at 1230 GMT.

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