Oil prices gained more than $1 on Thursday, trading below seven-year highs hit earlier this week, as fresh developments on the Russia-Ukraine crisis sparked concerns that supported prices.
Brent crude rose 73 cents, or 0.75%, to $97.57 a barrel at 0130 GMT, after soaring as high as $98.08.
U.S. West Texas Intermediate (WTI) crude futures jumped 85 cents, or 0.9%, to $92.95 a barrel, after rising to as much as $93.50.
U.S. Secretary of State Antony Blinken has said he believes Russia will invade Ukraine within hours after separatists on Wednesday asked for Russian help to repel “aggression” and as explosions rocked the breakaway eastern city of Donetsk.
Russia is the world’s second-largest oil producer, which mainly sells crude to European refineries, and is the largest supplier of natural gas to Europe, providing about 35% of its supply.
Adding to tensions, hundreds of Ukraine computers have been hit by data-wiping software as part of what country officials said was an intensifying wave of hacks aimed at the country as Russia massed troops around its borders.
“After a lull yesterday where the Russia-Ukraine situation fell out of the headlines, its inevitable reemergence overnight has caused a flight to safety once again and lifted oil over fears of a disruption in global energy supplies,” said Jeffrey Halley, senior market analyst at OANDA.
“One factor that could act as a temporary brake on prices is the Iran nuclear deal with rumours swirling around that a new agreement could be announced, possibly as early as this week,” he added. “However Ukraine fears, and their wider ramifications will continue to support oil prices which remain a solid buy on dips.”
The U.S. and Iran have been engaged in indirect nuclear talks in Vienna, in which a deal could lead to the removal of sanctions on Iranian oil sales and increase global supply.
Iran on Wednesday however urged Western powers to be “realistic” in talks to revive the 2015 nuclear deal, and said its top negotiator was returning to Tehran for consultations, suggesting a breakthrough in its discussions is not imminent.
Additionally, U.S. crude stockpiles rose 6 million barrels last week while distillate stocks fell, according to market sources who were citing American Petroleum Institute figures late on Tuesday.
Ahead of government data on Thursday, analysts forecast a 400,000-barrel build in crude and a drawdown in fuel stockpiles. [EIA/S]
Gasoline inventories rose by 427,000 barrels and distillates stockpiles fell by 985,000 barrels, the API data showed according to the sources, who spoke on condition of anonymity.