HOUSTON: Oil prices rose on Thursday after the United States issued new Iran-related sanctions and renewed tensions in the Middle East countered strength in the dollar.
Brent crude futures were up $1.16, or 1.64%, to $71.94 a barrel at 1:37 p.m. EDT (1737 GMT).
The US West Texas Intermediate crude (WTI) contract for April, expiring on Thursday, rose $1.07 to $68.23.
The more actively traded WTI May contract rose $1.15, or 1.72%, to $68.06.
The US on Thursday issued Iran-related sanctions, targeting entities including for the first time a Chinese “teapot”, or independent refinery, and vessels that supplied crude oil to such processing plants.
China is the largest importer of Iranian oil. “Teapot” refiners are private Chinese refineries that are the primary purchasers of Iranian oil.
Iran produces more than 3 million barrels per day of crude oil.
“We were looking for some kind of catalyst to move and that was the ticket that pushed us back towards the high,” said Phil Flynn, senior analyst with Price Futures Group.
Elsewhere, OPEC+ issued a new schedule for seven member nations including Russia, Kazakhstan and Iraq to make further oil output cuts to compensate for pumping above agreed levels.
The plan will represent monthly cuts of between 189,000 barrels per day and 435,000 bpd, according to a table on OPEC’s web site. The scheduled cuts last until June 2026.
Meanwhile, US crude inventories rose 1.7 million barrels, exceeding expectations for an increase of 512,000 barrels in an earlier Reuters poll.
Putting a lid on crude prices was the dollar, which inched up after the Federal Reserve indicated on Wednesday it was in no rush to cut interest rates further this year due to uncertainties around US tariffs.
The US dollar was up 0.5%, making crude more expensive for foreign buyers.
The US central bank left its key interest rate unchanged on Wednesday, a move widely anticipated by the market, but maintained its projection of two 25-basis-point rate cuts by the end of this year.
Interest rate cuts typically boost economic activity and energy demand.
Some analysts, however, are expecting an uneven oil price uptrend in the near term.
“I am expecting a choppy upward drift in the oil markets right now,” said Kelvin Wong, senior market analyst at OANDA, adding that stimulus measures by China and renewed hostilities between Israel and Hamas were bullish price drivers.
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