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Oil rises for a third day amid escalating Mideast tensions

Published 05/16/2019, 12:07 AM
© Reuters. FILE PHOTO: Pump jacks operate at sunset in an oilfield in Texas
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By Aaron Sheldrick

TOKYO (Reuters) - 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 U.S. inventories.

Brent crude futures were at $72.16 a barrel at 0349 GMT, up 39 cents, or 0.5%, from their last close. Brent closed up 0.7% on Wednesday.

U.S. 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 U.S. staff from the American embassy in Baghdad on Wednesday out of apparent concern about perceived threats from Iran.

While the gain in U.S. 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 Organization of the Petroleum Exporting Countries (OPEC) said on Tuesday that world demand for its oil would be higher than expected this year.

"Though supply-side disruptions remain supportive of oil prices, OPEC has yet to release indicative statements on supply plans," Benjamin Lu, commodities analyst at Phillip Futures in Singapore, told Reuters by email.

Supply losses from OPEC members Iran and Venezuela, now under U.S. sanctions, have deepened the impact of the OPEC-led production restrictions.

The so-called OPEC+ group of producers, which includes Russia, meets next month to review whether to maintain the pact beyond June.

U.S. crude inventories rose unexpectedly last week to their highest since September 2017, while gasoline stockpiles decreased more than forecast, the Energy Information Administration (EIA) 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.

© Reuters. FILE PHOTO: Pump jacks operate at sunset in an oilfield in Texas

Graphic: U.S. crude inventories, weekly changes since 2017 - https://tmsnrt.rs/2XlX17b

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