Oil rose for a second day as traders focused on tensions between the United States and Iran, which overshadowed signs of growing supplies.
Brent crude rose to nearly $70 a barrel, after posting gains of nearly 1% on Wednesday, while West Texas Intermediate crude settled near $65.
Although US President Donald Trump indicated that his goal was to reach a nuclear agreement with Tehran, in comments following talks with Israeli Prime Minister Benjamin Netanyahu, traders remain concerned about the possibility of military strikes and the resulting risks to supplies.
Annual gains driven by political tensions
Crude oil has risen in every week this year except one, as geopolitical tensions pushed futures higher after the United States intervened in Venezuela and then shifted its focus to Iran following a wave of protests that shook the regime.
However, banks see ample supplies, with Goldman Sachs Group indicating this week that a surplus is beginning to emerge, but is forming in less important price-setting locations.
In the United States, crude oil inventories jumped by 8.5 million barrels last week to their highest level since June, according to the Energy Information Administration.
The International Energy Agency is scheduled to release its monthly report on the oil market later on Thursday, which may again indicate a global supply surplus.
Beijing buys Venezuelan oil from Washington
As tensions escalate between Washington and Tehran, the United States has deployed a large naval force to the region. Following his meeting with Netanyahu, Trump stated that reaching an agreement with Tehran is his preferred option, according to a social media post. However, he added that if this doesn't happen, we'll see what happens.
Flows from Venezuela were also a focus of attention. U.S. Energy Secretary Chris Wright, speaking at a media roundtable in Caracas, said, without providing details, that China had purchased some Venezuelan oil that the United States had previously seized. He added that the so-called oil embargo on the Latin American country was effectively over.
The spot price differential for Brent crude, the difference between the two nearest contracts, remains in backwardation, indicating that short-term conditions are still relatively tight.
This widely watched indicator reached 69 cents a barrel within this upward structure, with little change compared to a difference of 65 cents a month ago.
In the latest trading, Brent crude futures for April settlement rose 0.5% to $69.72 a barrel by 12:00 pm in Singapore, while West Texas Intermediate crude futures for March delivery rose 0.6% to $64.99 a barrel.
In the latest trading, Brent crude futures for April delivery rose 0.3% to $69.59 a barrel at 2:11 p.m. Singapore time. Meanwhile, West Texas Intermediate crude futures for March delivery also climbed 0.3% to $64.85 a barrel.
