(Bloomberg) -- Oil prices rose slightly as tension over U.S. sanctions against Saudi Arabia countered a jump in American crude stockpiles.
Futures in New York rose 0.4 percent after the Trump administration issued financial penalties against 17 top Saudi officials over the death of journalist Jamal Khashoggi, hours after the kingdom charged 11 people for the murder. The geopolitical strife outweighed a government report showing the biggest weekly crude-storage increase since February 2017.
“These massive crude oil builds that we’ve seen week after week in the U.S. sucked all of the geopolitical risk out of the crude oil price,” said Rob Thummel, managing director at Tortoise, which manages $16 billion in energy-related assets. The announcement on sanctions “puts some risk back into the market.”
Among the sanctioned officials was Saud al-Qahtani, a former senior adviser to Crown Prince Mohammed bin Salman. The penalties freezing assets and limiting access to the U.S. financial system came shortly after the U.S. announced plans to end air refueling flights for the Saudi-led coalition fighting Houthi rebels in Yemen.
Also boosting the price of crude oil is speculation of renewed OPEC supply cuts. The cartel and its partners are considering reducing output by more than the 1 million barrels a day that Saudi Arabia proposed earlier this week, people familiar with the matter said. Nonetheless, Russian President Vladimir Putin said his country is happy with current prices.
Russia aims to continue cooperation with OPEC to stabilize the oil market, with existing efforts having shown “positive results,” Putin said.
West Texas Intermediate for December delivery advanced 21 cents to $56.46 a barrel on the New York Mercantile Exchange. Total volume traded Thursday was about 12 percent above the 100-day average.
Brent for January settlement climbed 50 cents to $66.62 a barrel on the London-based ICE (NYSE:ICE) Futures Europe exchange. The global benchmark crude was at a $9.94 premium to WTI for the same month.
But oil gave back much of its gains as the stockpile report weighed on prices. Crude inventories rose by 10.27 million barrels last week, while gasoline and distillate supplies declined, according to the Energy Information Administration. U.S. total petroleum supplied jumped to a record.
