Oil climbs as conflicts, weather weigh on supply

The news: Oil prices climbed overnight on expectations of tightening supply due to conflicts in the Middle East and Ukraine, and extreme North American cold weather.

The numbers: Brent crude futures rose 1.8% to USD80.40 a barrel, while US West Texas Intermediate (WTI) crude jumped 2.9% to USD75.55 a barrel.

The context: Analysts attributed the gains to geopolitical factors, with Israel’s invasion of Gaza, US military battles with Houthis in Yemen and the ongoing Russian invasion of Ukraine weighing on supply. Severe cold weather across the US is also limiting crude oil output in North Dakota, the No.3 oil-producing state, as well as hampering production in other states, Phil Flynn, an analyst with the Price Futures Group, told Reuters. This comes even as a robust stock market points to stronger demand instead of a possible economic downturn.