Oil prices have climbed slightly as the United States and Iran look to defuse the ongoing tensions between the two countries.

Brent crude futures went up $0.43 to $65.87 a barrel. West Texas Intermediate (WTI) futures added $0.61 and stood at $60.22 a barrel, according to Reuters.

Yesterday, two rockets were launched at Baghdad’s Green Zone, which is the home of the US Embassy in Iraq.

Reuters reported that there were no fatalities, nor any immediate claim of responsibility.

Stratfor oil analyst Greg Priddy said: “We need to be guarded about further sharp declines this week, as we will probably see more activity by proxy militias in Iraq.

“Our view remains that, in the absence of actual losses from conflict with Iran, the market will see mild downward pressure in Q1 on inventory builds.”

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By GlobalData

According to Reuters, crude oil inventories have increased by 1.2 million barrels (MMbl) in the week ending 3 January. This leaves total inventories at 431.1MMbl. Inventories have dropped 3.6MMbl, as per analyst forecasts.

Meanwhile, American multinational investment bank JP Morgan updated its Brent forecast to $64.50 a barrel this year.

It said the extent of supply disruption versus global oil inventories and reaction from US producers will determine oil prices.