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Oil prices have increased due to Middle East tensions following the seizure of a British-flagged tanker, and after weekly crude inventories in the US declined more than expected.

Brent crude LCOc1 futures rose by 14 cents to $63.32 a barrel, while US West Texas Intermediate crude CLc1 increased 17 cents at $56.05 a barrel, Reuters reported.

Tensions in the Middle East are ongoing after the British-flagged Stena Impero and its 23 crew members were seized by the Iranian Revolutionary Guard in the Strait of Hormuz last week.

Frame Funds Sydney managing director Hue Frame told Reuters: “We see it as a current tug of war between the bull case of OPEC production cuts, political risk in the Gulf and the recent reduction in crude inventories, versus the bear case of slowing global growth and a ramp-up in US production.”

Investors are concerned that slowing global economic growth will weaken demand for oil, due to which the overall sentiment in the market has darkened. Energy consultancy FGE lowered its global oil demand growth for 2019 to average 740,000bpd, thereby adding to a recent string of downward revisions for the market.

A series of weak purchasing manager index readings in the US and Europe confirmed worries about slower economic growth amid a trade dispute between the US and China.

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By GlobalData

Crude inventories in the US declined by nearly 11 million barrels last week, which is well above the expectations of analysts for a decline of four million barrels.