Oil prices increased over growing concerns of supply disruptions as tensions in the Middle East continue to escalate.
Brent crude futures jumped 53 cents to $72.30 per barrel, while US West Texas Intermediate (WTI) crude futures traded 47 cents higher at $62.49 a barrel, reported Reuters.
The US transferred its staff from the Baghdad embassy by helicopters due to perceived threats from Iran, with this friction supporting oil prices. The US has placed sanctions on Iranian crude exports since 2018. The exemptions on the sanctions were withdrawn in April 2019.
Earlier, attacks on oil tankers in the Gulf and reports of armed drones hitting Saudi Arabia’s two oil pumping stations heightened tensions in the region.
Citigroup was quoted by Reuters as stating in a note: “Brent looks poised to breach the upper bound of its recent $70-$73 a barrel price range as bullish headlines from the (Mideast) Gulf continue worrying investors.”
However, the further rise in oil prices was restricted by growing crude oil inventories in the US. The Energy Information Administration (EIA) said crude inventories increased by 5.4 million barrels last week.
The increase in oil prices was also capped on the uncertainty if the Organization of the Petroleum Exporting Countries (OPEC) and other allied countries will continue to maintain ongoing output cuts throughout 2019.
The oil cartel and other participants of the supply-cut deal will meet in June to review its policy.