Crude oil prices edged higher on Thursday as supply constraints and geopolitical risks in the Middle East bolstered market momentum, despite signs of easing international trade tensions.
As of 12:03 GMT, Brent crude had gained 31 cents, or about 0.5%, to reach $68.83 per barrel. Meanwhile, U.S. West Texas Intermediate (WTI) crude climbed 61 cents, or 0.9%, trading at $66.99 per barrel.
While analysts observed that global tariff disputes may temporarily dampen sentiment, ongoing supply limitations continue to provide support. The International Energy Agency recently noted that production increases are not keeping pace with consumption, indicating a tight global supply.
John Evans of PVM Oil Associates explained that the market is reacting to these low inventory levels, coupled with the resurgence of geopolitical concerns.
“Oil thinking has been distracted from the Middle East, and the reminders of Israel’s attacks on Syria and the drone attacks on oil infrastructure in Kurdistan are timely, once again adding a little fizz to proceedings,” Evans said.
Drone strikes in Iraq’s semi-autonomous Kurdish region have disrupted production, slashing output by as much as 150,000 barrels per day, according to two energy officials, after vital infrastructure was damaged.
Ashley Kelty of Panmure Liberum cautioned that pricing volatility may continue in the near term: “Near-term prices are set to remain volatile due to the uncertainty over the final scale of U.S. tariffs and the resultant impact on global growth.”
UBS commodities expert Giovanni Staunovo added, “For now, oil market indicators continue to suggest the physical market remains tight. But ongoing trade tensions could weigh on oil demand growth prospects and pose downside risks to prices.”
