Global oil prices jumped on Wednesday, traced to a momentary fall in US crude inventories and concerns that tensions in the Middle East could disrupt supplies.
Already, Brent crude futures, the international benchmark for oil prices, were at 58.27 dollars at 0131 GMT, up 39 cents, or 0.7 per cent from their last close – and a third above mid-year levels.
US West Texas Intermediate (WTI) crude futures were at 52.08 dollars per barrel, up 20 cents, or 0.4 per cent and almost a quarter above mid-June levels.
Traders said that prices were pushed up by a drop in US crude inventories as well as concerns that fighting in Iraq and mounting tensions between the United States and Iran could affect supplies.
US crude inventories fell by 7.1 million barrels in the week to Oct. 13 to 461.4 million barrels, the American Petroleum Institute (API) said late on Tuesday.
Official US fuel inventory data is due to be published later on Wednesday by the Energy Information Administration.
Adding to a tightening US market, tensions in the Middle East meant that a risk premium was being priced into oil markets.
Iraqi government forces captured the major Kurdish-held oil city of Kirkuk earlier this week, responding to a Kurdish independence referendum, and there are concerns that fighting could disrupt supplies.
Analysts say the Iraq crisis adds to a looming dispute between the United States and Iran.
Last Friday US President Donald Trump refused to certify Iran’s compliance over a nuclear deal, leaving Congress 60 days to decide further action against Tehran.
During the previous round of sanctions against Iran, some 1 million bpd of oil was cut from global markets.
With the rising oil prices and relative peace in Niger Delta, observers say Nigerian economy will stabilize faster as it is still being driven by oil earnings, despite moves by the government to drive diversification.
