By Adedapo Adesanya
Crude oil settled more than 1 per cent higher on Tuesday due to escalating tensions in Europe and the Middle East as wars in both regions continue to pose a threat to global supply, with Brent crude futures expanding by $1.08 or 1.3 per cent to $85.33 per barrel and the US West Texas Intermediate (WTI) crude futures growing by $1.24 or 1.5% to $81.57 a barrel.
According to Russian authorities and a Ukrainian intelligence source, prices increased after a big fire in a gasoline tank at an oil facility in Russia’s southern port of Azov was started by a Ukrainian drone attack.
Two oil product terminals at the port of Azov processed over 220,000 tonnes of fuel for export between January and May.
In addition to endangering the physical supply of oil worldwide, the escalating strikes on Russia’s oil processing complex are also driving up the risk premium included in crude contracts.
Meanwhile, Israeli Foreign Minister Israel Katz warned that a decision on an all-out war with Hezbollah was coming soon even as the US tries to avert a greater war between Israel and Lebanon’s Hezbollah movement.
Special envoy Amos Hochstein to US President Joe Biden said he had been dispatched to Lebanon immediately following a brief trip to Israel because the situation was “serious.”
Crude oil inventories in the US rose this week by 2.264 million barrels for the week ending June 14, according to the American Petroleum Institute (API). For the week prior, the API reported a 2.428 million barrel draw in crude inventories.
The official data from the US Energy Information Agency (IEA) will be released later on Wednesday.
Prices also climbed on comments from US Federal Reserve officials whose comments are valued by the global markets.
New York Federal Reserve President, Mr John Williams said interest rates will come down gradually over time, though declined to say when the U.S. central bank will kick off its monetary policy easing however, his Boston counterpart, Ms Susan Collins cautioned against getting carried away with recent inflation data, keeping investors on their toes and putting a ceiling on oil prices.
Modupe Gbadeyanka