Oil Prices Rise Amid Geopolitical Tensions and U.S. Inventory Declines

Oil prices continued their gains on Thursday, with West Texas Intermediate (WTI) futures rising by more than 1% to approach $57 per barrel, extending their rebound from a nearly five-year low, supported by escalating geopolitical tensions and tightening supply indications.

The primary support for prices came after the U.S. ordered a complete shutdown of maritime traffic related to sanctioned oil tankers traveling to and from Venezuela, following last week's escalation when U.S. forces detained a blacklisted tanker off the Venezuelan coast, according to official reports.

In parallel, Washington is moving towards tightening sanctions on the Russian energy sector in an effort to push for peace talks regarding Ukraine, raising market concerns about potential disruptions in global oil supplies.

On the data front, figures from the U.S. Energy Information Administration (EIA) showed that U.S. crude oil inventories fell by 1.27 million barrels last week, marking the second consecutive decline and exceeding market expectations of a draw of about 1.1 million barrels.

Additionally, inventories at the Cushing, Oklahoma hub saw their largest drop in nearly two months, providing further indication of supply tightness at the main delivery point for WTI contracts. Conversely, gasoline and distillate stocks rose, partially limiting the upward momentum.

These developments reflect increasing market sensitivity to geopolitical risks alongside fundamental factors, as investors await any updates that may affect the balance of global supply and demand in the near future.