Oil prices edged higher on Tuesday on tensions in the Middle East after the Yemen-based Houthi movement said it fired missiles on Saudi oil sites and on an expected drawdown in crude oil inventory in the United States.
Still, crude prices have remained rangebound in the past three weeks, as growing expectations of surging economic activity in the U.S. and China are balanced by the slow rate of vaccinations in Europe and anticipation of additional supply of oil from Iran in the coming months.
Brent crude oil futures was up 9 cents, or 0.1 per cent, at $63.37 a barrel while U.S. crude oil futures gained 11 cents, or 0.2 per cent, to $59.81 a barrel.
“Crude oil prices struggled to break out of the recent trading range amid an uncertain outlook for the market,” ANZ Research analysts said in a note.
U.S. crude oil stockpiles were expected to have dropped last week for a third straight week, while distillate and gasoline inventories likely grew, a preliminary Reuters poll showed on Monday.
The poll was conducted ahead of reports from the American Petroleum Institute, API, an industry group, due for release later on Tuesday and the Energy Information Administration, EIA, the statistical arm of the U.S. Department of Energy, on Wednesday.
Still, U.S. oil output from seven major shale formations is expected to rise for a third straight month, climbing by about 13,000 barrels per day (bpd) in May to 7.61 million bpd, the U.S Energy Information Administration said on Monday.
Supporting prices, Yemen’s Iran-aligned Houthi movement said on Monday it had fired 17 drones and two ballistic missiles at targets in Saudi Arabia, including Saudi Aramco facilities in Jubail and Jeddah.
There was no immediate Saudi confirmation. Saudi Aramco, the state oil firm, said when contacted by Reuters that it would respond at the earliest opportunity.
“However, these attacks have rarely caused any disruption to supply, and prices subsequently gave back most of the gains over the course of the session,” ANZ analysts said.