Brent crude futures advanced 56 cents, or 0.7%, to $77.36 a barrel, while U.S. West Texas Intermediate crude futures added 50 cents, or 0.7%, to $71.87 a barrel
Oil prices inched up on Thursday on concerns about escalating conflict in the Middle East with more attacks on shipping in the Red Sea, even as a surprise build in U.S. crude stockpiles capped gains.
Brent crude futures advanced 56 cents, or 0.7%, to $77.36 a barrel at 0802 GMT, while U.S. West Texas Intermediate crude futures added 50 cents, or 0.7%, to $71.87 a barrel.
The benchmarks settled lower on Wednesday after a surprise surge in U.S. crude stockpiles raised concerns about demand in the world’s biggest oil market.
But market jitters resurfaced after the largest attack yet on commercial shipping lanes in the Red Sea on Wednesday.
Oil prices seem to be in a state of indecision this week, as market participants try to digest a confluence of factors, said Yeap Jun Rong, market strategist at IG, pointing to geopolitical tensions in the Middle East, conflicting inventory reports in the US and slow global growth.
The latest EIA data serves as a dampener to the higher-than-expected drawdown in US crude inventories reflected in the API data yesterday, which led some unwinding of previous gains, Yeap added.
U.S. crude inventories rose by 1.3 million barrels in the week ended on January 5 to 432.4 million barrels, the Energy Information Administration said on Wednesday, against analyst expectations for a 700,000-barrel draw.
All eyes are now on U.S. inflation data which will shape views on how soon the Fed might pare interest rates.
An unexpected increase in U.S. crude inventories prompted worries about crude oil demand. But revised expectations for a rate reduction should support oil prices, as the economy is slowing down lower than Fed prediction, said Leon Li, analyst at CMC Markets.
Oil prices may have support above $70 until we see more data demonstrating higher downward pressure on the economy, said Li.
