Oil rose for a third day amid geopolitical tensions in the Middle East and expectations for a decline in US crude stockpiles.
Futures in New York climbed as much as 1 per cent, set for the highest close since late 2014.
A measure of oil volatility rose the most in two weeks amid concern that President Donald Trump will reimpose sanctions on Iran, while friction between the Islamic Republic and fellow Opec member Saudi Arabia increased with further violence in Yemen.
Oil has rallied this month as the Organisation of Petroleum Exporting Countries and its allies conclude they have all but wiped out a global crude surplus, while Iran signalled the group can end output cuts if prices continue to rise. Still, with production in the US at a record, investors are wary that expanding volumes from shale producers could thwart Opec’s efforts to eliminate the glut.
“Oil bulls refuse to budge,” said Tamas Varga, an analyst at PVM Oil Associates in London. Tuesday’s gain shows attention is “still firmly on geopolitics.”
West Texas crude for June delivery rose as much as 69 cents to $69.33 (€56.73) a barrel on the New York Mercantile Exchange, and traded at $68.83 in London London. Total volume traded was about 12 percent above the 100-day average.
Brent crude for June delivery advanced 5 cents to $74.76 a barrel on the London-based ICE Futures Europe exchange after climbing 0.9 per cent on Monday. The global benchmark crude traded at a $5.92 premium to June WTI after closing at $6.07 on Monday, the highest premium in more than three months.
In the US. crude stockpiles probably fell for a second week last week, losing 2.25 million barrels, according to a Bloomberg analyst survey ahead of government data on Wednesday. Inventories in the nation’s oil-storage hub of Cushing, Oklahoma, may have dropped by 150,000 barrels in the period, a separate survey showed.
– BloombergTags: Business, Donald Trump, Markets