Oil prices rose on Thursday (July 17), even as global trade tensions appeared to ease. Analysts cited low inventories and emerging Middle East risks as factors supporting the market.

Brent crude futures rose 31 cents, or about 0.5%, to $68.83 per barrel at 12:03 GMT. US West Texas Intermediate crude rose 61 cents, or 0.9%, to $66.99.

US President Donald Trump said letters notifying smaller countries about their US tariffs would be sent soon, and also mentioned the prospect of a deal with Beijing on drugs and a possible agreement with the European Union.

"Near-term prices are expected to remain volatile due to uncertainty about the final scale of US tariffs and their impact on global growth," said Ashley Kelty, an analyst at Panmure Liberum, adding that prices are likely to weaken in the medium term. The oil market on Thursday also reacted to the scenario of tightening supplies, said John Evans, an analyst at PVM Oil Associates.

Last week, the International Energy Agency (IEA) stated that rising oil production had not led to an increase in inventories, indicating the market's hunger for more oil. "Oil thinking has shifted away from the Middle East, and the reminder of Israel's incursion into Syria and drone attacks on oil infrastructure in Kurdistan are timely and once again add a bit of tension to the process," Evans said.

Drone attacks on oil fields in the semi-autonomous Kurdistan region of Iraq have cut crude production by 150,000 barrels per day, two energy officials said on Wednesday, as infrastructure damage forced some shutdowns.

"Currently, oil market indicators continue to suggest that the physical market remains tight. However, ongoing trade tensions could weigh on the outlook for oil demand growth and pose downside risks to prices," said UBS commodities analyst Giovanni Staunovo. (alg)

Source: Reuters