Oil prices rose 1.5% on Thursday, extending gains for a third day, on increasing concerns the United States (US) may carry out a military attack on key Middle Eastern producer Iran that could disrupt supply from the region.
Brent crude futures rose 94 cents, or 1.4%, to $69.34 a barrel. US West Texas Intermediate crude climbed 92 cents, or 1.5%, to $64.13 a barrel.
Both contracts have climbed about 5% since Monday and are at their highest since September 29.
Prices are rising as US President Donald Trump has increased pressure on Iran to end its nuclear programme with threats of military strikes and as a US naval group has arrived in the region. Iran is the fourth largest producer among the Organisation of the Petroleum Exporting Countries with output of 3.2 million barrels per day.
Trump is considering options to attack Iranian security forces and leaders to inspire protests to potentially topple the current regime, Reuters reported on Thursday, citing US sources familiar with the discussions.
“The main driver of oil prices remains geopolitical risk premium surrounding Iran and the Middle East, though unplanned outages in Kazakhstan and US, Winter Storm Fern, have had temporary impact as well,” DBS Bank’s energy sector team lead Suvro Sarkar said in an email.
US crude inventories fell by 2.3 million barrels to 423.8 million barrels in the week ended January 23, the Energy Information Administration said on Wednesday, compared with analysts’ expectations in a Reuters poll for a 1.8 million barrel rise.
Source: channelafrica