LONDON: Oil prices rose on Wednesday, maintaining their highest levels since June 23, lifted by attacks on shipping in the Red Sea and a forecast for lower US oil production, while uncertainty over US tariffs loomed in the background.
Brent crude futures gained 10 cents, or 0.1 percent, to $70.25 a barrel by 12:57 p.m. Saudi time. US West Texas Intermediate crude was up 15 cents, or 0.2 percent, to $68.48 a barrel.
After months of calm in the Red Sea, attacks in the major global shipping lane were renewed in the past week, which sources attribute to Yemen’s Iran-allied Houthi militia.
A mission was underway on Wednesday to rescue the crew from a cargo ship which sank in the Red Sea following an attack that killed at least four crew members. The Houthis have not claimed responsibility for the attack.
Oil prices were also buoyed by an Energy Information Administration forecast on Tuesday that the US will produce less oil in 2025 than previously expected, as declining oil prices have prompted US producers to slow activity.
On Tuesday, US President Donald Trump said he would announce a 50 percent tariff on copper, aiming to boost US production of a metal critical to electric vehicles, military hardware, the power grid and many consumer goods.
The announcement came as Trump delayed a deadline for some tariffs to Aug. 1, providing some hope to major trade partners that deals to ease duties could still be reached, though that left many companies still uncertain on the path forward.
While there is concern that the tariffs could curb demand for oil more immediately, there was strong travel demand during the US July 4 holiday weekend, while data also showed possible crude inventory builds in the US of around 7.1 million barrels.
With the Red Sea strikes and higher US holiday fuel consumption during summer, “the idea of ample future supply must give way to short-term considerations,” said a research note from oil broker PVM.
Official inventory data from the US Energy Information Administration is scheduled for release at 4:30 p.m..
OPEC+ oil producers were set for another big output boost for September as they complete both the unwinding of voluntary production cuts by eight members and the UAE’s move to a larger quota, five sources said.
This followed a Saturday announcement from the group approving a 548,000 barrels per day supply increase for August.
“Oil prices have stayed surprisingly resilient in the face of accelerated OPEC+ supply additions,” said DBS Bank’s energy sector team lead Suvro Sarkar.
UAE Energy Minister Suhail Al-Mazrouei said on Wednesday oil markets were absorbing OPEC+ production increases without building inventories, which means they are thirsty for more oil.
“You can see that even with the increases for several months, we haven’t seen a major buildup in inventories, which means the market needed those barrels,” he said.
