Oil prices increased by more than 1% on Wednesday 3 June, continuing a rise seen in the previous session, as renewed hostilities in the Middle East and stalled negotiations between Iran and the US added uncertainty to the market.<\/p>\n
At 06:40 GMT, Brent crude futures were up $1.56, or 1.6%, at $97.56 per barrel (bbl), reported Reuters.<\/p>\n
Meanwhile, US West Texas Intermediate (WTI) crude had increased by $1.61, or 1.7%, to $95.37\/bbl.<\/p>\n
Both benchmarks closed at their highest levels in a week during the prior session.<\/p>\n
The gains followed reports from the US military that Iran had fired ballistic missiles towards Kuwait and Bahrain but had not hit any targets.<\/p>\n
In response, the US military claims to have carried out strikes on Iran\u2019s Qeshm Island.<\/p>\n
On the supply front, US crude oil inventories dropped for a seventh consecutive week, according to American Petroleum Institute figures cited by market sources.<\/p>\n
Stocks fell by 6.8 million barrels in the week ending 29 May.<\/p>\n
Diplomatic efforts to resolve the conflict showed little progress, with Iranian media indicating that Tehran was reviewing a proposed agreement with Washington to halt the fighting.<\/p>\n
However, reports suggested that Iran had not communicated with the US for several days.<\/p>\n
The stalemate comes more than three months after the US and Israel began strikes against Iran, leaving a fragile ceasefire in place.<\/p>\n
Tensions in the region have heightened concerns about global oil supply at a time when inventories are declining.<\/p>\n
Meanwhile, Russia increased crude exports from its western ports by 15% in May compared to April, based on information from two industry sources, reported<\/a> Reuters.<\/p>\n This rise, to 2.5 million barrels per day (mbbl\/d), followed Ukrainian drone attacks that disrupted Russian refineries, compelling Moscow to redirect more crude for export.<\/p>\n Ukrainian attacks on Russian refining and export facilities have caused domestic fuel shortages and reduced Russian oil output, according to the International Energy Agency (IEA).<\/p>\n Elsewhere, the IEA warned that global oil inventories could reach critical lows if current stock draw rates persist as peak summer demand approaches, reported Reuters<\/a>.<\/p>\n Chinese crude imports in May were 6mbbl\/d lower than in March, which had previously balanced markets and contributed to weaker prices despite restricted shipping through the Strait of Hormuz.<\/p>\n According to the IEA, Gulf oil producers have lost around 14mbbl\/d of supply since late February, while output from the US, Argentina, Brazil and Venezuela has increased.<\/p>\n