Oil Prices Edge Up But Gains Capped By Rise In US Crude Inventories By Reuters | Old North State Wealth News
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Oil prices edge up but gains capped by rise in US crude inventories By Reuters



By Shariq Khan

NEW YORK (Reuters) -Oil prices rose on Wednesday as investors worried about supply disruptions from a worsening geopolitical landscape, although a surprise jump in {{8849|U.S. crcrude oil inventories eased some of those concerns.

futures rose 72 cents, or 0.8%, to $89.64 a barrel by 1:57 p.m. ET (1757 GMT). U.S. West Texas Intermediate futures rose 60 cents, or 0.7%, to $85.75 a barrel.

Both contracts were up more than a dollar during the session, setting new five-month highs for the third consecutive session.

Prices pulled back slightly after the U.S. Energy Information Administration reported a 3.2 million barrel increase in crude stocks. Analysts polled by Reuters had expected an over 1.5 million barrel decrease which was in line with preliminary data reported by the American Petroleum Institute on Tuesday.

“The EIA report went in the other direction on crude oil from what the API reported yesterday so that has helped pause the rally a little bit,” said Bob Yawger, director of energy futures at Mizuho.

Technical indicators also pressured prices, signaling both Brent and WTI futures were overbought.

“We needed a little bit of a pullback to reload before gunning higher again. Other than being overbought, market fundamentals continue to point upwards,” he said.

Brent and WTI futures have rallied on concerns that oil supplies could tighten due to Ukraine’s attacks on Russian refineries and potential widening of the conflict in the Middle East.

Iran, which provides support for the Hamas militia fighting Israel in Gaza, has vowed revenge against Israel for an attack on Monday that killed high-ranking military personnel. Iran is the third-largest producer in the Organization of the Petroleum Exporting Countries (OPEC).

Oil markets are figuring out how to price in these developments and for how long, alongside strong economic data from U.S. and China and expectations of declining U.S. crude output, KPMG U.S. energy leader Angie Gildea said.

Bank of America Global Research raised its 2024 Brent and WTI forecasts to $86 and $81 a barrel respectively, it said in a note.

Meanwhile, a meeting of the top OPEC+ ministers kept oil output policy unchanged and pressed some countries to boost compliance with output cuts.

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