Experts say oil prices could rise in the coming year amid heightened geopolitical tensions. 

Conflict has disrupted oil trading in the Red Sea, where attacks on ships by Yemen-based Houthi militants continued this week after a U.S.-led task force was deployed to the area. 

Cole Smead, president and portfolio manager at Smead Capital Management, told BNN Bloomberg on Friday that volatility in the commodities market drives investors away. 

But even as investors weary of the oil market, “demand is not going away,” he said.

“The world' (has) woken up to the idea that this commodity is scarcer than it was,” he said. “It's a lot scarcer than people think.”

According to Smead, the larger risk in the oil market is not that prices fall between US$70 and $60 per barrel, but that the geopolitical backdrop worsens. 

“The bigger risk is we wake up squeezing the market to a $150 (per barrel) level,” he said. “That's what usually happens in (a) crisis.”

West Texas Intermediate (WTI) was trading at US$72.15 per barrel early afternoon Friday. The global benchmark Brent traded around $77.41 per barrel Friday after a 0.3 per cent gain. 

Phillip Streible, chief market strategist at Blue Line Futures, told BNN Bloomberg that oil is a great asset and hedge against geopolitical risks and inflation. 

“I do think with these geopolitical disruptions, you should see oil prices naturally reach a floor and start to climb again from here,” Streible said in a Friday interview.

He added that as U.S. production reaches new all-time highs, he believes the “growth rate of that production is starting to stall out.”