Oil prices rose on Thursday, supported by tensions in the Middle East. However USA, was unable to regain most of the previous day’s losses due to the surprise increase in crude oil inventories.
West Texas Intermediate (WTI) crude futures rose 23 cents, or 0.3 percent, to $68.38 a barrel, while Brent crude futures rose 19 cents, or 0.3 percent, to $70.57 a barrel.
Both indicators were down more than $2 a barrel on Wednesday.
Tensions are rising between Iran and world powers over last week’s drone strike. Therefore, it seems unlikely that the nuclear deal talks will be finalized shortly, and that it will provide Iran with an ease of sanctions anytime soon.
Israeli planes struck rocket launch sites in Lebanon early Thursday in response to earlier shells fired at Israel.
The response came after last Thursday’s attack on a tanker off the coast of Oman, which Israel blamed on Iran. Two crew members, one British and the other Romanian, were killed in the attack, which Iran denied.
The US State Department said on Wednesday it believes the Iranians hijacked the Panama-flagged Asphalt Princess tanker in the Gulf of Oman, although it could not confirm.
Meanwhile, the risk of potential supply disruptions along with the anticipated intense storms in the Atlantic are supporting prices. The National Oceanic and Atmospheric Administration (NOAA) on Wednesday revised its outlook upwards for the 2021 Atlantic hurricane season and announced its forecast for an above-normal season and a 65% probability of three to five major hurricanes.
Delta outbreake in China, the second-largest oil consumer, suppresses the oil gains, and causes more restrictions and flight disruptions in the country.
U.S. crude oil inventories rose, gasoline fell. Prices also fell sharply in the previous session after the US Energy Information Administration (EIA) announced that crude inventories increased by an unexpected 3.6 million barrels last week. However, some analysts pointed to a larger-than-anticipated 5.3 million barrel decline in fuel stocks.
The drop in US gasoline inventories to the lowest level since November 2020 shows that fuel demand conditions are quite resilient.
