Crude oil futures rose yesterday amid signs of tightening global markets and the geopolitical outlook in the Middle East remains uncertain.
The West Texas Intermediate (WTI) contract for April rose 70 cents (0.9%) to close at $78.61 a barrel. Brent added 64 cents (0.77%) to close at $83.67 a barrel.
According to UBS Strategist, Glovanni Staunovo said the price premium of the futures contract in the first month and the following month recorded an increase in recent weeks.
A premium for immediate delivery over late delivery is usually a sign that the oil market is tightening.
Meanwhile, compliance with OPEC+ production cuts has increased with exports down about 900,000 barrels in February. It was the lowest level since August.
In the US, commercial crude oil stocks rose by 3.5 million barrels last week and total inventories including finished products were largely unchanged.
According to the US Energy Information Administration Stockpiles, there has been an increase in recent weeks as the rate of refinery utilization has decreased.
The geopolitical outlook in the Middle East remains uncertain as the US works towards a cease-fire in Gaza while tensions rise on the Israel-Lebanon border and in the Red Sea.
A temporary ceasefire in exchange for the release of hostages in Gaza has the potential to reduce the risk of a conflict sweeping the Middle East that disrupts crude oil supplies.
Still, Israel has launched repeated strikes against Hezbollah targets in Lebanon in recent days, and Houthi militants in Yemen continue to attack shipping in the Red Sea.
