Investing.com — Oil prices rose Thursday, buoyed by fears of supply disruptions due to worsening tensions in the war between Russia and Ukraine, although a build-up in U.S. inventories limited overall gains.
At 09:00 ET (14:00 GMT), the stock rose 1.9% to $74.19 per barrel, while it rose 2.1% to $70.19 per barrel.
Tensions between Russia and Ukraine are the basis for oil production
Prices rose this week as Ukraine’s use of long-range weapons against Russia heightened tensions between the two countries, raising concerns that oil supplies from Moscow could be disrupted.
Ukraine fired British cruise missiles at Russia on Wednesday, a day after firing US missiles. Kiev’s air force said Russia responded early Thursday by launching an intercontinental ballistic missile at Ukraine, the first time Moscow has used such a powerful long-range missile during the war.
“The risk is Ukraine targeting Russian energy infrastructure, while the other risk is uncertainty about how Russia responds to these attacks,” ING analysts said in a note.
“However, Iran’s pledge to stop stockpiling uranium offsets some of the geopolitical risk as it potentially reduces some of the supply risks related to Iran before President-elect Trump takes office.”
US inventories are growing faster than expected
Data from the US Energy Information Administration showed on Wednesday that US oil production grew by 0.5 million barrels in the week to November 15, more than expected.
The build, while minimal, marked a third straight week of builds.
More worrying for oil markets was the fact that almost 2.1 million units had been built, raising some concerns that fuel demand in the US was declining as the winter season approached.
Oil prices remained hesitant on the prospect of increased supply and weakening demand in the coming year, which some analysts expect will cause a supply glut.
OPEC+ will hold back production increases again?
The International Energy Agency said last week that oil supply will substantially exceed demand by 2025, even if OPEC+ cuts continue.
The Organization of the Petroleum Exporting Countries and allies, a group known as OPEC+, will meet again in early December, and Reuters reported that the cartel could again curb output increases when it meets on December 1 due to weak global developments. demand for oil.
The production group pumps about half of the world’s oil and initially planned to gradually reverse production cuts from late 2024 through 2025.
(Ambar Warrick contributed to this article.)
