February marked the second consecutive month of price gains for crude oil (CL=F, BZ=F). Yahoo Finance Senior Business Reporter Ines Ferré explains the key factors at play in the energy market, among them being core signals indicative of supply tightness.

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Editor's note: This article was written by Luke Carberry Mogan.

Video Transcript

SEANA SMITH: Well, oil prices slightly higher this morning after closing out a second straight month of gains. Joining us now to recap the moves that we saw in February and how that sets us up here for March is Ines at the big board. Ines.

INES FERRÉ: Yeah, Seana. And we are looking at oil that's up more than 2% for West Texas Intermediate, above the $80 a barrel level. That's the highest level for 2024. And it is the highest level that we have seen since November of last year.

A couple of reasons why we are seeing oil prices go up again, as you mentioned, the second month in a row of gains was February ended yesterday. Well, part of the reason is because the near term contracts for oil are trading hands at a premium with respect to the farther out contracts. That is a technical term called backwardation. I'm not going to get too technical with you on it. But it does signal that there is tightness in the supply market.

Also, taking a look at OPEC plus and the oil alliance with respect to reports that they may be deciding to extend their production cuts into the second quarter. That would also send oil prices higher. We have seen demand coming out of Asia. And that demand has been a little bit more than expected than forecasted.

And finally, we've looked-- we're looking at the Middle East conflict that's happening there as well. You've got those Red Sea tensions. And I've been hearing increasingly from analysts about concerns about the Strait of Hormuz, and that is right up against Iran. And that's considered the choke point of oil-- one of the major choke points for oil. So if there were to be disruptions there, you'd be seeing prices go higher.

But look, year-to-date, we are seeing that WTI is up about 14% now since the beginning of the year. Brent crude is up about 10%, guys.