Oil prices moved higher on Thursday morning as investors reacted to rising political risks. The main concern is growing tension between the US-Iran governments.
Brent crude futures increased by 34 cents, reaching $69.74 per barrel. US West Texas Intermediate rose by 37 cents to $65.00 per barrel. Both benchmarks also closed higher in the previous session.
The gains came despite a sharp rise in US crude stock levels. Market sentiment was driven more by geopolitical risks than supply data.
On Wednesday, US President Donald Trump spoke after meeting Israeli Prime Minister Benjamin Netanyahu. He said no final agreement was reached on Iran. However, he confirmed that talks with Tehran would continue.
Earlier this week, Trump said he might send a second aircraft carrier to the Middle East. This would happen if no deal is reached with Iran. These comments increased uncertainty in energy markets.
The US-Iran issue remains a key factor for oil traders. Any conflict could disrupt supply routes in the region. This keeps prices supported, even when inventory data is weak.
Last week, US and Iranian officials held indirect talks in Oman. These discussions aimed to reduce tensions and restart diplomatic efforts. So far, no date has been set for the next meeting.
Analysts say prices may rise further if tensions escalate. Tony Sycamore from IG said a break above $66 for WTI would need stronger conflict signals. A calm situation could push prices back toward $60.
Economic data also influenced the market. The US Labor Department reported strong job growth in January. The unemployment rate fell to 4.3%. This suggests steady demand for fuel.
Mingyu Gao from China Futures said the healthy US economy supports oil consumption. This adds to the positive outlook for prices.
However, gains were limited by US inventory figures. The Energy Information Administration reported a large stock increase. US crude inventories rose by 8.5 million barrels last week. This was far higher than market expectations.
Despite this, global oil inventories remain below forecast levels for the year. Net long positions in oil markets are also not too high.
Gao said oil prices may stay biased to the upside. He pointed to the US-Iran situation, tighter sanctions on Russian oil, and lower export expectations.
In other news read more about Gold Prices Surge on Safe-Haven Demand Amid Rising US-Iran Tensions
Overall, the US-Iran relationship continues to shape oil market trends. Traders remain cautious, watching both diplomacy and military signals closely.
