LONDON (Reuters) – Oil settled near its near two-month high, boosted by forecasts of a possible reduction in supplies in the third quarter and risks linked to conflict in the Middle East.
The American Petroleum Institute (API) reported that U.S. crude inventories rose by 914,000 barrels, according to market sources. However, analysts expect a decline of nearly 3 million barrels in official inventory data expected to be released later today.
At 10.40am Brent crude futures gained 0.2% to 85.19 dollars a barrel. U.S. West Texas Intermediate crude futures rose 0.3% to $81.11.
** Official data on US inventories provided by the Energy Information Administration (EIA) are expected at 4.30pm today.
According to analysts, the price strength of the previous months also indicates strong physical demand for oil, a boon for prices in the short term. August contract prices for Brent and WTI were about 80 cents per barrel higher than those in September.
“Leading oil market indicators signal that crude’s rebound reflects a stronger underlying physical market,” J.P. Morgan analysts wrote in a note to clients.
On the geopolitical front, Houthi attacks on shipping in the Red Sea and growing hostilities between Israel and Hezbollah in Lebanon are also factors supporting prices, according to Suvro Sarkar of DBS Bank.
The Houthis have so far sunk two ships and seized another, and yesterday announced they had used a missile to hit a vessel in the Arabian Sea.
(Translated by Luca Fratangelo, edited by Gianluca Semeraro)
