Oil prices rose in Asian trade on Thursday as persistent concerns over geopolitical tensions between the U.S. and Iran saw traders price in a greater risk premium for crude.
Markets were also digesting some signs of strength in the U.S. economy, although a sharp increase in U.S. inventories limited bigger gains.
Brent oil futures for April rose 0.4% to $69.64 a barrel, while West Texas Intermediate crude futures rose 0.4% to $64.74 a barrel by 21:19 ET (02:19 GMT).
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US-Iran tensions remain at the fore Traders were seen pricing in a greater risk premium for oil from tensions in the Middle East, as reports earlier this week showed Washington considering sending a second aircraft carrier to the region.
While Iran and the U.S. had touted some progress in talks held over the weekend, there still appeared to be no conclusive deal on Tehran’s nuclear activities, leaving markets on edge.
Other reports also showed Washington considering seizing oil tankers carrying Iranian crude, while a meeting between U.S. President Donald Trump and Israeli Prime Minister Benjamin Netanyahu offered few definitive cues.
Markets were concerned that any military escalation in the Middle East will disrupt production and supplies in the oil-rich region.
Markets digest strong US payrolls, bumper inventory build A batch of U.S. economic prints offered mixed readings to the oil market.
Stronger-than-expected nonfarm payrolls data for January pointed to unexpected strength in the U.S. economy, driving up hopes that demand in the world’s biggest fuel consumer will remain strong.
But the data also diminished expectations for lower U.S. interest rates, pushing up the dollar and limiting gains in oil prices.
Crude markets were further pressured by data showing a substantially larger-than-expected, 8.5 million barrel build in U.S. oil inventories in the past week.
The print showed some reversal in tight U.S. supplies after extreme cold weather disrupted production across the country in the beginning of the year.
Beyond the U.S., focus in the coming days will be on Chinese travel trends during the Lunar New Year holidays, which begin in the coming week.
The holiday is usually marked by outsized demand for travel in the country, and portends an increase in fuel consumption.
