Oil prices rise to $64.92 on supply disruption fears despite U.S. crude inventories uptick
Oil prices rose on Thursday as Middle East supply fears mounted despite an unexpected increase in U.S. crude and fuel inventories. Investor focus remained on the renewed Iran-U.S. nuclear talks and their potential impact on supplies and crude prices.
As of 4:35 GMT, Brent crude futures gained 0.02 percent to $64.92 a barrel. Meanwhile, U.S. West Texas Intermediate (WTI) crude futures rose 0.06 percent to $61.61. Both benchmarks lost 0.7 percent on Wednesday.
U.S. crude inventories build
Oil prices dipped after the
Energy Information Administration
said on Wednesday that U.S. crude and fuel inventories posted surprise stock builds last week as crude imports hit a six-week high and gasoline and distillate demand slipped. Crude inventories rose by 1.3 million barrels to 443.2 million barrels in the week ended May 16, the EIA said. Analysts had expected a 1.3 million-barrel decline.
Rising U.S. inventories have raised concerns, but some investors expect the summer driving season starting after Memorial Day weekend to make a dent in stocks, limiting further declines.
Amid current market conditions, traders remain cautious as they assess conflicting signals over U.S.-Iran nuclear talks and a potential outbreak in geopolitical tensions in the Middle East. The fifth round of nuclear talks between Iran and the United States will take place on May 23 in Rome, Oman's foreign minister said on Wednesday.
Read: Dubai 24-carat gold prices rise AED3.5 as global rates hit two-week high
U.S.-Iran talks in focus
Iran is the third-largest producer among members of the Organization of the Petroleum Exporting Countries and an attack could impact crude flows from the country, triggering an uptick in oil prices.
U.S. and Iran have held several rounds of talks this year over Iran's nuclear program, while U.S. President Donald Trump has revived a campaign of stronger sanctions on the nation's crude exports. Any signs of progress in nuclear talks might cap the upside for oil prices.
Oil traders will also await the release of key U.S. economic data on Thursday, including the advanced S&P Purchasing Managers Index (PMI), the Chicago Fed National Activity Index, the initial jobless claims and existing home sales reports. Any negative readings could trigger selling pressure on the U.S. dollar and lift dollar-denominated commodity prices in the near term.
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