NEW YORK (CNBC) - The price of a barrel of crude oil has reached $90, a level unseen since October 2014. It’s the second seven-year record in a week, and insiders are predicting $100 oil by the year’s end, the rise fueled by tight supply and the threat of war in Ukraine.
After closing at $88.20, the Brent crude price climbed to $90.08 by late Wednesday morning, an increase of more than 2%. The U.S. West Texas Intermediate benchmark was also up by 2.2%, sitting at $87.50 at time of writing.
The last time Brent spiked above $90 was in October 2014. Last week, the oil benchmark also hit a seven-year high, with that spike driven by hostilities in the United Arab Emirates.
The latest surge comes as the oil-producing OPEC nations slowly increase their output to pre-pandemic levels. However, these producers have not scaled up their spare capacity to buffer against future disruptions, and prices in turn have shown no sign of falling. Moreover, the U.S. is lagging behind its record daily production by around a million barrels, per Reuters, and Russia is increasing its production at a slower rate than expected.
All in all, the combination of market and geopolitical factors has led Goldman Sachs to predict an oil price of more than $100 by the third quarter of this year. The all-time highest oil price ever recorded was $143, in mid-2008.