Oil Prices Rise as US-Iran Tensions Fuel Supply Concerns
Oil prices moved slightly higher on Thursday morning as investors monitored rising tensions between the United States and Iran. Markets remain concerned that potential attacks on Tehran or disruptions to key shipping routes could impact global oil supply.
Brent crude futures gained 19 cents, or 0.27%, to trade at $69.59 per barrel. Meanwhile, U.S. West Texas Intermediate (WTI) crude rose 20 cents, or 0.31%, to $64.83.
Both major benchmarks closed higher on Wednesday. Brent climbed 0.87%, while WTI advanced more than 1.05%, as geopolitical worries outweighed a significant build in U.S. crude inventories.
US-Iran Developments Keep Oil Market on Edge
U.S. President Donald Trump, following talks with Israeli Prime Minister Benjamin Netanyahu, stated that no “definitive” agreement had been reached regarding the next steps with Iran. However, he confirmed that negotiations with Tehran will continue.
Earlier in the week, Trump indicated he was considering deploying a second aircraft carrier to the Middle East if diplomatic efforts fail. At the same time, Washington and Tehran are preparing to resume discussions after indirect talks were held in Oman last week. The timing and location of the next round of negotiations have not yet been confirmed.
According to IG analyst Tony Sycamore, a sustained move above the $65–$66 range in WTI would likely require further escalation in the Middle East. On the other hand, signs of de-escalation could trigger profit-taking, potentially pushing prices back toward the $60–$61 area.
Strong US Economy Supports Oil Demand Outlook
Fresh U.S. economic data also played a role in supporting oil prices. The Labor Department reported that job growth accelerated in January, while the unemployment rate fell to 4.3%. These figures highlight resilience in the U.S. economy and reinforce expectations for steady energy demand.
Analysts note that solid economic performance in the United States continues to underpin global oil consumption forecasts.
Rising US Crude Inventories Limit Gains
Despite upward momentum, oil price gains were capped by a sharp increase in U.S. crude inventories. The Energy Information Administration reported that stockpiles rose by 8.5 million barrels last week to 428.8 million barrels. This figure significantly exceeded analysts’ expectations of a 793,000-barrel increase.
Even so, global oil inventory builds since the start of the year have generally remained below projections. In addition, net long positions in overseas crude oil futures and options have not yet reached excessive levels.
Market analysts suggest that oil prices may remain biased to the upside, supported by ongoing U.S.-Iran tensions, tighter sanctions on Russian oil, and expectations of reduced exports.
