LONDON: Oil prices rose on Thursday, even as global trade tensions appeared to cool, with analysts pointing to low inventories and renewed Middle East risks as factors supporting the market.
Brent crude futures were up 31 cents, or around 0.5 percent, to $68.83 a barrel at 03:03 p.m. Saudi time. US West Texas Intermediate crude futures were up 61 cents, or 0.9 percent, at $66.99.
US President Donald Trump has said letters notifying smaller countries of their US tariff rates would go out soon, and has also alluded to prospects of a deal with Beijing on illicit drugs and a possible agreement with the EU.
“Near-term prices (are) set to remain volatile due to the uncertainty over the final scale of US tariffs and the resultant impact on global growth,” said Ashley Kelty, an analyst at Panmure Liberum, adding that prices would likely settle lower in the medium term.
The oil market on Thursday was also reacting to a tightened inventory scenario, said John Evans, analyst at PVM Oil Associates.
Last week, the International Energy Agency said that oil output increases were not leading to higher inventories, which showed markets were thirsty for more oil.
“Oil thinking has been distracted from the Middle East, and the reminders of Israel’s attacks into Syria and the drone attacks on oil infrastructure in Kurdistan are timely and once again add a little fizz to proceedings,” Evans said.
Drone attacks on oilfields in Iraq's semi-autonomous Kurdistan region have slashed crude output by up to 150,000 barrels per day, two energy officials said on Wednesday, as infrastructure damage forced multiple shutdowns.
“For now, oil market indicators continue to suggest the physical market remains tight. But ongoing trade tensions could weigh on oil demand growth prospects and pose downside risks to prices,” said UBS commodities analyst Giovanni Staunovo.
