Oil prices gained about 2% on Wednesday, buoyed by potential supply risks should tensions between the U.S. and Iran escalate, while draws of crude from key stockpiles suggested stronger demand.
Brent crude oil futures traveled upward $1.39, or 2.02%, at $70.19 U.S. a barrel this morning. U.S. West Texas Intermediate crude rose $1.34, or nearly 2.1%, to $65.30.
U.S. President Donald Trump said on Tuesday he was considering sending a second aircraft carrier to the Middle East, even as Washington and Tehran prepare to resume negotiations aimed at averting a new conflict.
A slightly weaker dollar was helping prices higher as well. A stronger U.S. currency hurts demand for dollar-denominated crude from foreign buyers.
In the wider market, the Organization of the Petroleum Exporting Countries (OPEC) left its supply-demand expectations for the oil market largely unchanged in its monthly report, but highlighted that global oil demand for the wider group’s crude will drop by 400,000 bpd in the second quarter compared to the first.
Traders also await weekly U.S. oil inventory data from the Energy Information Administration on Wednesday. U.S. crude inventories rose by 13.4 million barrels in the week ended February 6.
