Oil prices rose in early trade on Thursday as the escalating conflict in the Middle East raised investor concerns on potential disruptions in crude supply.
Brent crude futures increased 64 cents, or 0.87 per cent, to $74.54 a barrel, while the US West Texas Intermediate crude futures gained 72 cents, or 1.03 per cent, to $70.82 a barrel.
Apprehensions of further escalation in the conflict weighed in on investors’ minds as an Israeli strike on central Beirut’s Bachoura neighbourhood early on Thursday reportedly left two killed and 11 wounded, analysts said.
But an unexpected build-up in US crude inventories on Wednesday helped ease some supply concerns and curbed oil price gains, Reuters reported.
US crude inventories rose by 3.9 million barrels to 417 million barrels in the week ended September 27, the Energy Information Administration said, compared with analysts’ expectations in a Reuters poll for a 1.3-million-barrel draw.
“Swelling US inventories added evidence that the market is well supplied and can withstand any disruptions,” ANZ analysts said in a note.
Some investors remained unfazed as global crude supplies have yet to be disrupted by unrest in the key producing region, and spare OPEC capacity tempered worries.
“After Iran’s attack, prices may stay elevated or remain more volatile for a little longer, but there’s enough production, there’s enough supply in the world,” chief executive officer of East Daley Analytics, Jim Simpson, told Reuters.
OPEC has enough spare oil capacity to compensate for a full loss of Iranian supply if Israel knocks out that country’s facilities, he said.
Follow us on
