Amid concerns over tight supply as well as geopolitical tensions in Eastern Europe and the Middle East, oil prices rose 1 percent on Monday, hovering near seven-year highs hit in the previous session.

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US West Texas Intermediate crude rose 99 cents, or 1.1 percent, to $87.81 a barrel, having gained 21 cents on Friday. Brent crude rose 92 cents, or 1.0 percent, to $90.95 a barrel at 0051 GMT, after adding 69 cents on Friday. The front-month contract for March delivery expires later in the day. The most-active Brent contract, for April delivery, was trading at $89.69, up $1.17 or 1.3 percent.

Both benchmarks recorded their highest since October 2014 on Friday, $91.70 and $88.84, respectively, and a sixth straight weekly gain.

"Underlying anxiety about global supply shortages, coupled with ongoing geopolitical risks, have caused the market to start the week on a strong note," Reuters quoted as saying Toshitaka Tazawa, an analyst at Fujitomi Securities.

"With an expectation that OPEC+ will keep the existing policy of gradual increase of production, oil prices will likely stay on a bullish sentiment this week," he said, predicting Brent to remain above $90 a barrel and WTI to head toward $90.

Major producers in the Organization of the Petroleum Exporting Countries (OPEC) and allies led by Russia, collectively known as OPEC+, have raised their output target each month since August by 400,000 barrels per day (bpd) as they unwind record production cuts made in 2020.

But they have failed to meet their production targets as some members have struggled with capacity constraints.

At its Feb. 2 meeting, OPEC+ is likely to stick with a planned rise in its oil output target for March, several OPEC+ sources told Reuters, as it sees demand recovering despite downside risks from the pandemic and looming interest rate rises.

Tensions between Russia and the West also underpinned crude prices. Russia, the world's second-largest oil producer, and the West have been at loggerheads over Ukraine, fanning fears that energy supplies to Europe could be disrupted.

The head of NATO said on Sunday that Europe needs to diversify its energy supplies as Britain warned it was "highly likely" that Russia was looking to invade Ukraine.

The market is also on alert over the Middle East situation after attacks on United Arab Emirates by Yemen's Houthi group.

Meanwhile, more than 1,400 U.S. flights were cancelled on Sunday after the US northeast states were walloped a day earlier by a deadly winter storm that prompted several states to declare emergencies.

-With agency inputs

First Published:Jan 31, 2022 7:49 AM IST