Geopolitical jitters lift oil prices

19 Jun 2024 , 09:58 AM

Oil increased marginally in early trading on Wednesday, as concerns over growing violence in Europe and the Middle East outweighed demand concerns following an unexpected increase in US oil stocks.

Brent crude futures for August delivery increased 6 cents to $85.39 per barrel. In June, U.S. West Texas Intermediate crude rose 10 cents to $81.67 a barrel.

Both benchmarks rose by more than a dollar in the previous session after a Ukrainian drone strike caused an oil terminal fire at a major Russian port, according to Russian officials and a Ukrainian intelligence source.

In the Middle East, Israeli Foreign Minister Israel Katz warned of an impending “all-out war” with Lebanon’s Hezbollah, even as the US sought to avoid a larger clash between Israel and Iran-backed Hezbollah.

An growing violence in the region raises the prospect of disruptions to petroleum supply from important producers.

Keeping oil prices from increasing higher, U.S. crude stockpiles increased by 2.264 million barrels in the week ending June 14, according to market sources quoting American Petroleum Institute estimates on Tuesday. Analysts surveyed by Reuters predicted a 2.2 million barrel draw in crude stocks.

However, petrol stockpiles declined by 1.077 million barrels, while distillates increased by 538,000 barrels, according to sources who spoke on condition of anonymity.

The Energy Information Administration is scheduled to release official U.S. stock figures at 1500 GMT.

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