Oil hits seven-week high on demand hopes, war jitters
demand optimism and concerns over escalating conflicts offset an industry report that said U.S. crude inventories unexpectedly rose.
Brent crude futures for August, due to expire on Thursday, were up 20 cents to $85.53 a barrel by 1235 GMT, while the more active September contract gained 21 cents to $84.74.
U.S. West Texas Intermediate crude was up 3 cents to $81.60 per barrel.
«The current snapshot presents an underwhelming picture but there are green shoots that indicate a more optimistic outlook,» said Tamas Varga of oil broker PVM.
The Brent price being $8 over the lows hit in early June «shows genuine optimism that the global oil balance will eventually tighten,» Varga added.
Both benchmarks, having recovered strongly in the last two weeks, gained more than $1 in the previous session to seven-week peaks after a Ukrainian drone strike led to an oil terminal fire at a major Russian port.
In the Middle East, Israeli Foreign Minister Israel Katz warned of a possible «all out war» with Lebanon's Hezbollah, even as the U.S. attempted to avoid a broader conflict between Israel and the Iran-backed group.
An escalating war risks supply disruption in the key oil-producing region.
«Any cooling off between both parties seems difficult in the near term, which may keep oil prices well-supported as market participants shrug off pockets of weakness on the economic front, from weaker-than-expected U.S. retail sales to mixed sets of data out of China this week,» said Yeap Jun Rong, a market strategist at IG in Singapore.
