Tensions In Middle East Heats Up As Oil Prices Rise

The possibility of rising conflict in the Middle East caused oil prices to rise on Thursday following the boarding of an oil tanker in Oman by an armed group.

By 09:16 GMT, U.S. West Texas Intermediate oil prices gained 98 cents, or 1.4%, to $72.35, while Brent crude futures gained $1.03, or 1.3%, to $77.83 a barrel. However, gains were limited by an unexpected increase in U.S. crude stockpiles.

The previous day Yemen-based Houthis mounted their largest attack yet on commercial shipping lanes in the Red Sea and Israeli strikes in southern and central Gaza also intensified.

The United States and Britain hinted they would take further measures if the attacks continued.

The United Nations Security Council, meanwhile, passed a resolution demanding an immediate end to the Houthi strikes

The oil benchmarks had settled lower on Wednesday after a surprise jump in U.S. crude stockpiles raised concerns over demand in the world’s largest oil market.

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U.S. crude inventories (USOILC=ECI) rose by 1.3 million barrels to 432.4 million barrels in the week ended Jan. 5, the EIA said on Wednesday, against analyst expectations for a draw of 700,000 barrels.

Meanwhile, despite the world’s top oil exporter announcing its biggest price decrease in 13 months, Chinese refiners requested less Saudi crude oil in February, according to sources familiar with the subject.

In the coming weeks, China’s customs department will disclose December trade figures on Friday, providing a year-to-date picture of overall demand in the world’s largest oil importer.