Oil Prices Rise on Tensions in Middle East

Jakarta, - Oil prices rallied in Asian trading on Thursday (11/1). The strengthening was due to market sentiment on rising tensions in the Middle East and a surprise rise in US crude stockpiles that pushed oil prices down about 80 cents in the previous session.

According to Reuters, US West Texas Intermediate crude futures rose 20 cents, or 0.28 percent, to reach US$71.57 a barrel at 02:02 GMT. Brent crude futures also rose 21 cents, or 0.27 percent, to US$77.01 per barrel.

The US Energy Information Administration (EIA) reported US crude inventories increased by 1.3 million barrels in the week ended January 5 to 432.4 million barrels.

The figure was above analysts' expectations of a 700,000-barrel decline.

"Bearish fundamentals, including higher inventories and higher production, are playing against rising tensions in the Middle East," IG analysts wrote in a note.

A number of analysts expect prices to be in the range of US$67-$77 in the near term.

On Wednesday, the Yemen-based Houthi group launched their largest-ever attack on commercial shipping lanes in the Red Sea.

The US and UK signaled that they would take further action if the attacks continued, and the UN Security Council passed a resolution demanding an immediate halt to the attacks.

Israeli attacks on southern and central Gaza also intensified yesterday.

Meanwhile, China's Customs Administration Office will release December trade data next Friday, providing a full-year snapshot of overall demand in the world's largest oil-buying nation.

Analysts expect the data to show that China's imports of goods rose 0.3 percent last month, after falling 0.6 percent in November.

Sources : cnnindonesia.com- Jan 11.24

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