Oil prices edged higher in Asian trade on Thursday after surging more than 4% in the previous session, supported by lingering U.S.-Iran tensions and lack of progress in Russia-Ukraine peace talks, while a draw in U.S. crude inventories also provided support.
As of 22:40 ET (03:40 GMT), Brent Oil Futures expiring in April gained 0.3% to $70.59 per barrel, while West Texas Intermediate (WTI) crude futures rose 0.4% to $65.45 per barrel.
Both contracts jumped over 4%, or by more than $3, in the previous trading session.
Trading activity remained thin across Asia due to Lunar New Year holidays in several regional markets.
Geopolitical tensions support prices
Investors remained focused on Middle East risks, with mounting friction between Washington and Tehran raising fears of potential disruptions to oil flows through the Strait of Hormuz, a critical chokepoint for global energy trade.
Media reports stating heightened military and naval activity in the Gulf have reinforced market perceptions of supply vulnerability.
At the same time, hopes for any easing of sanctions on Russian energy exports faded after Russia-Ukraine talks produced no breakthrough.
US crude stocks fell unexpectedly last week- API
Further support came from industry data showing a tighter U.S. supply picture.
The American Petroleum Institute reported U.S. crude stockpiles fell by about 609,000 barrels in the week to Feb. 13, defying expectations in a Reuters poll for a build of 2.1 million barrels, and reversing a prior week’s sharp increase of over 13 million barrels.
A draw in inventories typically signals stronger refinery demand or constrained supply, both bullish for prices.
Official government data from the Energy Information Administration is due later on Thursday for confirmation.
Investors remained cautious over the global demand outlook and the prospect of further monetary tightening in major economies, which could weigh on fuel consumption.
Minutes from the Federal Reserve’s latest policy meeting highlighted a split among officials over whether further rate hikes might still be needed.
Policymakers broadly agreed inflation risks remained tilted to the upside, but differed on how restrictive policy should become and how long rates should stay elevated.
Investors now await U.S. personal consumption expenditures (PCE) price index data due on Friday, the Fed’s preferred inflation gauge, for clearer direction on monetary policy.
Source: Investing