Oil prices rose in early Thursday trade. Brent crude rose by 0.77 per cent, or 0.59 cents to trade at the price of $77.34 a barrel at 02:51 am CDT.
Meanwhile, West Texas Intermediate (WTI) climbed by 0.80 per cent, or 0.57 cents, reaching the price of $71.89 a barrel.
Oil increased marginally due to worries that the Middle East conflict intensifies and potential attacks on Gaza and Red Sea shipping continue. However, gains were limited by an unexpected increase in U.S. crude stockpiles.
Slow global growth, conflicting inventory reports from the United States, and geopolitical tensions in the Middle East were some of the reasons why “oil prices seem to be in a state of indecision this week.” Yeap Jun Rong, market strategist at IG told Reuters.
The EIA reported on Wednesday that U.S. crude inventories (USOILC=ECI) rose by 1.3 million barrels to 432.4 million barrels during the week ending on January 5, defying analyst expectations of a 700,000-barrel draw.
“The latest EIA data serves as a dampener to the higher-than-expected drawdown in U.S. crude inventories reflected in the API data yesterday, which drove some unwinding of earlier gains,” he added.
Moreover, current trends in U.S. inflation data will influence the perception of when the Federal Reserve will likely reduce interest rates.
