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Oil rises on Middle East tensions despite US stockpile build

Oil rises on Middle East tensions despite US stockpile build

Mubasher: Oil on Thursday traded higher, as the impact of a surprise build in the US crude inventories was eclipsed by worries over supply shortages resulting from escalating tensions in the Middle East, according to Reuters.

At 9:30 am GMT, US Nymex crude futures climbed by 0.95% to $62.61 per barrel (pb), while global benchmark Brent futures rose by 0.86% to $72.39 pb.

Crude markets were drawing support from the risk of conflict in the Middle East, amid reports of helicopters carrying US staff from the US embassy in Baghdad on Wednesday, out of concern regarding perceived threats from Iran.

Moreover, this month the US announced an end to the sanction waivers granted to a handful of nations which allowed them to import oil barrels from Iran.

This prompted Tehran to loosen restrictions on its nuclear programme.

In the same vein, supply worries were further stoked after four oil carriers in the Gulf were anonymously attacked, while Saudi Arabia announced that armed drones targeted two of its crude pumping stations.

Meanwhile, prices were kept in check as US crude stockpiles unexpectedly climbed to their highest level since 2017.

Also capping price gains is the uncertainty about whether the Organization of the Petroleum Exporting Countries (OPEC) and other producers will keep their supply restraints in place into the second half of the year.

OPEC on Tuesday stated that global demand for its crude barrels would be higher than expected.

The producer club and non-affiliated partners, including Russia, an alliance known as OPEC+, are due to meet next month in Vienna to discuss their output policy.