Investing.com — Oil prices rose on Wednesday, boosted by heightened tensions caused by the conflict between Russia and Ukraine, although there are signs of a bumper in the US. stocks limited profits.
At 08:20 ET (13:20 GMT), the January expiring price rose 0.6% to $73.72 per barrel, while the stock rose 0.6% to $69.66 per barrel.
Tensions between Russia and Ukraine in pictures
Oil prices posted some gains this week on the prospect of supply disruptions due to an escalation of the war between Russia and Ukraine, especially after Moscow raised the prospect of nuclear retaliation for Ukrainian attacks in the wake of the US authorization of the use of long-range missiles by Kiev.
The United States closed its embassy in Kiev earlier Wednesday due to “specific information about a potentially significant airstrike.”
These developments threaten to draw the West even further into the conflict.
“Some of the geopolitical risks associated with Russia and Ukraine were undermined by reports that Iran offered to stop increasing its stockpiles of uranium enriched to 60%,” ING analysts said in a note.
“The International Atomic Energy Agency has said that Iran has taken the first steps to limit production. If this happens, it will remove some of the supply risks associated with Iranian oil when President-elect Trump takes office.”
US Oil Inventories See Bumper Build – API
The limited gain was also due to sector data showing that US oil inventories grew much faster than expected in the week to November 15.
Data from oil inventories shown rose by 4.75 million barrels last week, far exceeding expectations for an expansion of 0.8 million barrels.
The reading usually heralds a similar trend from , due later on Wednesday.
U.S. oil inventories have risen more than expected in the past two weeks, keeping traders alert to increased supply from the world’s largest oil producer.
This trend is linked to fears of an oil oversupply in 2025, especially as demand among major oil importers weakens.
Uncertainties in the oil market – UBS
“The oil market faces more uncertainties after Trump’s victory. While the initial focus of the market seems to account for the negative impact of higher US supply and risks to demand from tariffs, the The net impact could be more neutral in our view, given the balanced risks on the supply side (i.e. lower Iranian exports),” UBS said in a Nov. 19 note.
In the very near term, the Swiss bank expects to remain around the mid-$70s, supported by the extension of OPEC+ cuts and inventory draws.
“We see oil prices stabilizing next year as the market remains balanced in the absence of OPEC+ production increases. We do expect a negative impact on oil demand due to slower GDP growth and higher prices, but continue to expect demand to will continue to grow at the end of 2020.”
(Ambar Warrick contributed to this article.)
