Oil prices rose slightly within a range as geopolitical risks in the Middle East were offset by reports of expanding US stockpiles.
Brent crude oil hovered around $79 a barrel after rising 1.6% in the past two sessions. The Houthis said they targeted two ships in the southern Red Sea, the latest in a series of attacks that have forced major changes in global trade. The US has vowed further strikes against Iranian forces and their proxies in the region.
The industry-funded American Petroleum Institute said last week that crude oil inventories across the country rose by 674,000 barrels, including an increase in crude oil inventories in Cushing, Oklahoma, according to people familiar with the data. Official statistics are expected to be released later Wednesday.
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Oil prices are only slightly higher than at the beginning of the year, with Middle East war premiums and higher transport costs largely offset by a mixed macroeconomic outlook. The lackluster price performance belies a boom in oil derivatives trading, with total open interest in major futures contracts rising to the highest level since March 2022.
“The oil market remains narrow and range-driven,” said Keshav Lohiya, founder of consultancy Oilytics. “One of the biggest reasons why the oil market is absorbing all of this geopolitical risk premium is that supplies from non-OPEC countries are quietly increasing.”
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