Oil inches higher amid rising tension in the Middle East

Beijing — Oil prices ticked higher in Asian trading as markets measured rising tension in the Middle East against a surprise build in US crude stockpiles that pushed oil benchmarks down about 80c in the previous session.

US West Texas Intermediate crude futures gained 20c, or 0.28%, to reach $71.57 a barrel by 2.02am GMT. Benchmark Brent crude oil futures rose 21c, or 0.27%, to $77.01 a barrel.

US crude inventories increased by 1.3-million barrels in the week ended on January 5 to 432.4-million barrels, the EIA said on Wednesday, against analyst the expectation of a 700,000-barrel draw.

“Bearish fundamentals, including higher inventories and higher production, are playing out against rising tensions in the Middle East,” IG analysts wrote in a note. The analysts expect to see prices around the $67-$77 range in the near term, they said.

On Wednesday, Yemen-based Houthis mounted their largest attack yet on commercial shipping lanes in the Red Sea. The US and Britain hinted they would take further measures if the attacks continued, and the UN security council passed a resolution demanding an immediate end to the strikes.

Israeli strikes in southern and central Gaza also intensified on Wednesday.

China’s customs administration will release December trade data on Friday, giving a full-year picture of overall demand in the world’s largest oil buyer. Analysts expect the data to show that China’s goods imports rose 0.3% in December, after dropping 0.6% in November.

Reuters