Oil prices rose again today, extending gains from the previous session, as hostilities in the Middle East erupted anew and talks between Tehran and Washington showed little progress.
Brent futures gained $1.67, or 1.78%, to $97.67 a barrel this evening, while US West Texas Intermediate (WTI) crude climbed $1.96, or 2.1%, to $95.72.
Brent and WTI hit their highest since May 27 and May 22, respectively, earlier in the day.
Iran launched ballistic missiles towards regional neighbours Kuwait and Bahrain, injuring dozens according to Kuwaiti authorities, and US forces conducted strikes on Iran's Qeshm Island.
Tom Baker, a managing director for Bahrain at global commodities trader Vitol, told an energy conference yesterday that the global oil market was underpricing some risks from the Iran war, even as the conflict entered its fourth month.
The International Energy Agency's warning that global oil inventories could hit critical levels ahead of the peak summer demand period if stock draws continue at their current pace was adding to the bullish sentiment.
"The stalling in the US-Iran negotiations and IEA warnings of critical global low stock levels are adding upward layers in risk premium in benchmark prices," said Emril Jamil, a senior analyst for oil at LSEG.
US crude oil inventories fell for a seventh week in a row last week, according to market sources citing American Petroleum Institute data released yesterday. Crude stocks declined by 6.8 million barrels in the week ended May 29, the sources said.
