Oil prices climbed on Thursday due to ongoing conflict in the Middle East, although an unexpected rise in U.S. crude and gasoline inventories limited the gains.
According to Reuters, Brent crude oil futures increased by 92 cents, or 1.08%, reaching $86.17 a barrel by 09:46 a.m. EDT (1446 GMT).
U.S. West Texas Intermediate (WTI) crude futures rose by 86 cents, or 1.06%, to $81.76. Both benchmarks had settled slightly higher on Wednesday.
Tensions between Israel and Lebanon’s Hezbollah have been escalating, raising fears that the conflict could spread to other countries, including major oil producer Iran.
France has expressed extreme concern about the situation in Lebanon and has called for restraint.
Panmure Gordon analyst Ashley Kelty noted that any spread of the conflict could significantly impact crude supplies from the Middle East.
Turkish President Tayyip Erdogan declared solidarity with Lebanon and urged regional countries to show support.
Meanwhile, Israel has been conducting operations in Gaza City, telling Palestinians to move south, and has bombed the southern city of Rafah as part of its ongoing campaign in Gaza.
The U.S. Energy Information Administration (EIA) reported a 3.6 million barrel increase in U.S. crude oil stocks last week, contrary to analysts’ expectations of a 2.9 million barrel drawdown.
U.S. gasoline stocks also rose by 2.7 million barrels, whereas analysts had anticipated a 1 million barrel reduction.
“We are right now at the peak of the summer driving season, with gasoline and diesel demand peaking as people travel over the July 4 weekend, so for markets to be moving sideways now, then we may well even see a dip after the holiday weekend,” said Tim Snyder, economist at Matador Economics.
