Oil prices continued to rise on Thursday, marking their fifth consecutive day of gains. Growing concerns over Middle East tensions have supported the market.
Investors fear that continued regional tensions could disrupt oil exports. Such disruptions could reduce global supplies and push prices higher.
Brent crude rose 0.28% to $91.87 per barrel. Meanwhile, U.S. West Texas Intermediate crude reached $86 per barrel.
Both benchmarks have gained throughout the past five trading sessions. On Wednesday, they reached their highest levels since July 24. Prices have remained close to those levels as market concerns continue.
Hiroyuki Kikukawa, head of strategy at Nissan Securities, said intermittent attacks in the Middle East have supported oil prices.
However, he noted that the market lacks a new major catalyst. A significant escalation in regional tensions could provide another strong boost to prices.
Kikukawa also expects oil prices to continue rising gradually. He pointed to continued uncertainty surrounding peace talks and tensions involving Iran, Oman, and the United Arab Emirates.
The UAE’s decision to suspend all financial and economic transactions with Iran until further notice has also drawn attention. The move has highlighted the complicated relations between the two countries.
Meanwhile, shipping traffic through the Strait of Hormuz has fallen significantly compared with levels before the latest tensions. The waterway remains a major route for global energy shipments.
Any further disruption could therefore have a major impact on oil markets. Traders are closely monitoring developments around the strategic strait.
U.S. fuel inventories have also provided mixed signals for the market. Diesel and heating oil inventories declined for a third consecutive week.
However, U.S. crude oil inventories increased by 4.4 million barrels last week. The increase surprised the market.
Analysts had expected crude inventories to fall by around 600,000 barrels. The unexpected rise could limit some of the upward pressure on prices.
Still, geopolitical risks remain the main focus for oil traders. If tensions continue to affect regional exports or shipping, oil prices could remain elevated in the coming days.
