LONDON: Oil prices rose on Wednesday for a fifth straight session on fears of Iranian supply disruptions due to deadly civil unrest and as the US and Iran traded threats.
Brent futures were up 84 cents, or 1.3 per cent, at US$66.31 a barrel at 1054 GMT. US West Texas Intermediate crude was up 81 cents, or 1.3 per cent, at US$61.96 a barrel.
Tehran warned US allies in the Middle East it would strike US bases on their soil if Washington attacked Iran. Some personnel were advised to leave a US military base in Qatar.
“We are in a period of geopolitical instability and potential supply disruption,” said Jorge Montepeque, managing director at Onyx Capital Group. “The protests in Iran are seen as potentially leading to a regime change. That’s a big one and the possibility of a US attack is looking high.” US President Donald Trump on Tuesday urged Iranians to keep protesting and said help was on the way, without specifying what that meant.
“Protests in Iran risk tightening global oil balances through near-term supply losses, but mainly through rising geopolitical risk premium,” Citi analysts said in a note, raising their outlook for Brent over the next three months to US$70 a barrel.
The analysts noted, however, that the protests had not spread to the main Iranian oil-producing areas, which had limited the effect on actual supply.
The oil price rise was also limited by significant crude and product builds in the US, the American Petroleum Institute reported late on Tuesday.
Crude stocks in the US, the world’s biggest oil consumer, rose by 5.23 million barrels in the week ended January 9, the API reported, citing market sources.
Gasoline inventories climbed 8.23 million barrels, while distillate inventories rose 4.34 million barrels from a week earlier. Stockpile data from the US Energy Information Administration will be released later on Wednesday.
On Tuesday, a Reuters poll showed that US crude oil stockpiles were expected to have fallen last week, while gasoline and distillate inventories likely rose. Also capping prices, Organization of the Petroleum Exporting Countries member Venezuela has begun reversing oil production cuts made under a US embargo as crude exports were also resuming, three sources said.
Two supertankers departed Venezuelan waters on Monday with about 1.8 million barrels each of crude in what may be the first shipments of a 50-million-barrel supply deal between Caracas and Washington to get exports moving again following the US capture of Venezuelan President Nicolas Maduro.
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