Investing.com – Crude oil prices settled higher on Thursday amid ongoing expectations that new US sanctions on Iran would trim global crude supplies while flaring tensions in the Middle East also supported sentiment.
On the New York Mercantile Exchange for June delivery rose 22 cents to settle at $71.36 a barrel, while on London’s Intercontinental Exchange, rose 19 cents to trade at $77.40 a barrel.
An exchange of missiles between Iran and Israel in Syria overnight added a further risk premium to oil prices – a trend that is expected to continue, Price Futures Group analyst Phil Flynn said on Thursday.
“This backdrop of increasingly high tensions in the Middle East are even more supportive as US oil inventory shows big drops in supply against robust and near record-breaking demand,” Flynn said.
The tensions between the two nations come in the wake of United States’ decision to leave the Iran nuclear deal, widely expected to weigh on Iran crude exports.
The Information Energy Agency warned Thursday the restoration of sanctions on Iran “may have implications” for the market balance.
The US Treasury Department said earlier this week countries should “reduce their volume of crude oil purchases 280-day from Iran during [the 180 day] wind-down period.”
Crude oil prices had come under pressure earlier in the session after energy information provider Genscape reported Thursday crude stockpiles at the Cushing, Oklahoma storage hub, as of Tuesday rose 479,644 barrels to 39.56 million barrels, according to analysts.
The prospect of an uptick in crude supplies emerged a day after the Energy Information Administration reported Wednesday fell for the first time in three weeks.
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