Oil prices extend gains on Wednesday

Oil prices extended gains on Wednesday as reports that the United States may prolong its blockade of Iranian ports raised concerns over continued supply disruptions in the Middle East.

Brent crude for June rose $1.11, or 1 per cent, to $112.37 a barrel by 0647 GMT, marking an eighth straight daily gain, while US West Texas Intermediate crude added 51 cents, or 0.51 per cent, to $100.44 a barrel.

The Wall Street Journal reported that US President Donald Trump had asked aides to prepare for an extended blockade aimed at tightening pressure on Iran’s economy and oil exports. Analysts said any prolonged disruption would further support prices, especially with Iran’s closure of the Strait of Hormuz, a route for around 20 per cent of global oil and LNG supplies.

Markets were also assessing the United Arab Emirates’ decision to leave OPEC, though analysts said the move was unlikely to have a major near-term impact.

Meanwhile, industry data showed US crude inventories fell by 1.79 million barrels last week, while gasoline and distillate stocks also declined, indicating firm demand.

Attribution: Reuters