BEIJING: Oil prices rose modestly on Thursday morning as investors reacted to growing concerns over escalating tensions between the United States and Iran, amid fears that potential attacks on Tehran or disruptions to shipping routes could impact global oil supplies.Brent crude futures climbed 27 cents, or 0.39%, to $69.67 per barrel at 0350 GMT.
Meanwhile, US West Texas Intermediate (WTI) crude gained 29 cents, or 0.45%, to $64.92 per barrel.Both benchmarks had already settled higher on Wednesday, with Brent advancing 0.87% and WTI rising more than 1.05%, as geopolitical concerns outweighed the impact of rising US crude inventories.
US President Donald Trump, speaking after talks with Israeli Prime Minister Benjamin Netanyahu, said no “definitive” agreement had been reached on how to proceed regarding Iran.
However, he emphasized that negotiations with Tehran would continue. Earlier this week, Trump indicated he was considering deploying a second aircraft carrier to the Middle East if talks fail to yield a deal.US and Iranian diplomats held indirect discussions in Oman last week, though the date and venue for the next round of talks have not yet been announced.
According to IG analyst Tony Sycamore, a sustained move above the $65–$66 range for WTI would likely require further escalation in the Middle East.
Conversely, any signs of de-escalation could prompt profit-taking, potentially pushing prices back toward the $60–$61 level.Strong US economic data also supported oil demand expectations. The Labor Department reported that job growth accelerated unexpectedly in January, while the unemployment rate declined to 4.3%, signaling continued resilience in the economy.“The resilient US economy is also supporting oil demand expectations,” said Mingyu Gao, chief researcher for energy and chemicals at China Futures.
However, gains were capped by a significant build in US crude inventories. The Energy Information Administration reported that US crude stocks rose by 8.5 million barrels to 428.8 million barrels last week — far exceeding analysts’ expectations in a Reuters poll for a 793,000-barrel increase.
Despite the inventory surge, Gao noted that global oil stock builds have generally been below expectations since the start of the year.
In addition, net long positions in overseas crude oil futures and options remain below overweight levels.As a result, oil prices are likely to retain an upward bias, supported by ongoing US-Iran tensions, tighter sanctions on Russian oil, and expectations of reduced exports, Gao added.
