Oil prices edge higher as supply risks mount
By Shariq Khan
NEW YORK, June 28 (Reuters) -Oil prices rose in early Asian trading hours on Friday, setting up a third straight weekly jump, as concerns about supply problems from escalating geopolitical tensions and weather-related disruptions offset signs of weak demand.
Brent crude futures for August settlement, which expire on Friday, rose 15 cents, or 0.2% to $86.54 a barrel by 0020 GMT. The Brent contract for September was also up 0.2% at $85.44 a barrel.
U.S. West Texas Intermediate crude futures for August delivery rose 24 cents, or 0.3%, to $81.98 a barrel.
Oil prices have shrugged off signs of weak demand in the United States, the biggest oil consuming nation, and rallied higher as cross-border strains between Israel and Lebanon's Hezbollah escalated. A widening war in the Middle East could draw in countries like Iran, one of the top oil exporters in the region.
The French foreign ministry expressed concern over the situation in Lebanon on Thursday, while Turkey earlier said it stands in solidarity with Lebanon and called on regional governments' support.
Oil supplies have also come under pressure from weather-related disruptions which could worsen in the coming weeks. Heavy rains have caused Ecuador's production to decline by 100,000 barrels a day over the past week, FGE Energy said on Friday.
The U.S. Gulf Coast, home to a bulk of the country's energy and export infrastructure, could also be hit by adverse weather in the coming days with the U.S. National Hurricane Center tracking at least one weather system that could become a cyclone and headed towards the region.
Brent and WTI futures have gained 1.5% so far on a weekly basis.
On the demand front, rising U.S. crude stockpiles and weak gasoline consumption has kept a ceiling above oil prices. Government data this week showed an unexpected jump in crude inventories in the country as fuel demand weakened.
However, expectations of record travel over the July 4th weekend in the U.S. could lift gasoline demand and help draw stockpiles.
Reporting by Shariq Khan in New York; Editing by Stephen Coates
Related Assets
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
