Oil strengthens amid escalating tension in Middle East
Tokyo — Oil prices rose on Thursday for a third straight session, as the risk of conflict in the Middle East stoked fears of supply disruptions, negating an unexpected rise in US inventories.
Brent crude futures were at $72.16 a barrel at 3.49am GMT, up 39 cents, or 0.5%, from their last close. Brent closed up 0.7% on Wednesday.
US West Texas Intermediate (WTI) crude futures were at $62.41 per barrel, up 39 cents, or 0.6%, from their previous settlement. WTI closed up 0.4% in the last session.
Analysts said oil was drawing support from heightened tensions in the Middle East, with helicopters carrying US staff from the American embassy in Baghdad on Wednesday out of apparent concern about perceived threats from Iran.
While the gain in US inventories overnight is helping to cap prices, so too is uncertainty about whether Opec and other producers will maintain into the second half of the year supply cuts that have boosted prices more than 30% so far in 2019.
The Organisation of the Petroleum Exporting Countries (Opec) said on Tuesday that world demand for its oil would be higher than expected in 2019.
“Though supply-side disruptions remain supportive of oil prices, Opec has yet to release indicative statements on supply plans,” said Benjamin Lu, commodities analyst at Phillip Futures in Singapore.
Supply losses from Opec members Iran and Venezuela, now under US sanctions, have deepened the impact of the Opec-led production restrictions.
The so-called Opec+ group of producers, which includes Russia, meets in June to review whether to maintain the pact beyond the end of that month.
US crude inventories rose unexpectedly last week to their highest since September 2017, while gasoline stockpiles decreased more than forecast, the Energy Information Administration said.
Crude stocks swelled by 5.4-million barrels, surprising analysts who had expected a decrease of 800,000 barrels for the week ended on May 10.