Geopolitics drives oil prices higher

Crude oil prices were higher again on Friday as various geopolitical issues caused concerns among investors.

The gains came as the conflict between Israel and Hamas continued in Gaza, with some concern that the violence there will spread regionally and upset oil production and shipments, and on expectations that OPEC member nations will implement already-approved cuts in production.

Also causing worries was Russia’s refusal to ship natural gas to the Ukraine due to a contract dispute, although Ukrainian reserves were said to be sufficient for the time being.

Still, there were some reports during the day Friday of less gas being received and lower pressure than usual in pipelines in Hungary and Poland, while the Ukrainian state energy supplier, Naftogaz, denied that it was siphoning gas from Russian lines.

Meanwhile, energy suppliers in Germany, Bulgaria and Turkey said there had been no noticeable effect from the dispute on their supplies of natural gas.

February contracts for West Texas Intermediate crude was up $1.74 to $46.34 per barrel on the New York Mercantile Exchange, while Brent crude for February delivery added $1.32 to $46.91 per barrel on the ICE Futures Europe exchange in London.

Nymex February gasoline futures added 5 cents to $1.11 per gallon, while February heating oil gained 4 cents to $1.48 per gallon.