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OIl prices increased for a second consecutive day as geopolitical tensions resurfaced post the US downing of an Iranian drone close to an American aircraft carrier in the Arabian Sea.
West Texas Intermediate increased towards $64 a barrel post adding 1.7% on Tuesday. Brent closed above $67.
The skirmish spooked oil markets, but President Donald Trump reiterated the sides are maintaining diplomatic talks, and White House Press Secretary Karoline Leavitt confirmed US-Iran negotiations are still scheduled for Friday.
Meanwhile, US crude inventories fell by 11.1 million barrels last week, according to the American Petroleum Institute. That would be the biggest drawdown since June if confirmed by official data due on Wednesday.
Concerns over any conflict in the Middle East, a source of about a third of the world’s crude, helped lift prices last month despite signs of a growing oversupply. Oil has also been caught up in the tumult in wider commodity markets that saw gold and silver plummet before recouping some of those losses on Tuesday.
In another sign of rising tensions, a US-flagged oil tanker was hailed by Iranian ships in the Straits of Hormuz, a vital waterway for the global trade. Iran’s Islamic Revolutionary Guard Corps “harassed” the Stena Imperative, which is part of a US-military fuel procurement program, as it made the transit, US Central Command said.
Elsewhere, OPEC+ expects global oil demand to grow gradually from March or April, bringing additional balance to the market, according to Russian Deputy Prime Minister Alexander Novak. The group is due to decide on March 1 whether to resume monthly output increases after a first-quarter pause.
With inputs from Bloomberg
Also Read: Asian shares decline post US Tech-led selloff
West Texas Intermediate increased towards $64 a barrel post adding 1.7% on Tuesday. Brent closed above $67.
The skirmish spooked oil markets, but President Donald Trump reiterated the sides are maintaining diplomatic talks, and White House Press Secretary Karoline Leavitt confirmed US-Iran negotiations are still scheduled for Friday.
Meanwhile, US crude inventories fell by 11.1 million barrels last week, according to the American Petroleum Institute. That would be the biggest drawdown since June if confirmed by official data due on Wednesday.
Concerns over any conflict in the Middle East, a source of about a third of the world’s crude, helped lift prices last month despite signs of a growing oversupply. Oil has also been caught up in the tumult in wider commodity markets that saw gold and silver plummet before recouping some of those losses on Tuesday.
In another sign of rising tensions, a US-flagged oil tanker was hailed by Iranian ships in the Straits of Hormuz, a vital waterway for the global trade. Iran’s Islamic Revolutionary Guard Corps “harassed” the Stena Imperative, which is part of a US-military fuel procurement program, as it made the transit, US Central Command said.
Elsewhere, OPEC+ expects global oil demand to grow gradually from March or April, bringing additional balance to the market, according to Russian Deputy Prime Minister Alexander Novak. The group is due to decide on March 1 whether to resume monthly output increases after a first-quarter pause.
With inputs from Bloomberg
Also Read: Asian shares decline post US Tech-led selloff
