After ending January with the first monthly gain since September, oil futures have seen an upward trend early on Thursday. Traders are closely monitoring U.S. production outages and tensions in the Middle East, which have been impacting prices.
Price Moves
- West Texas Intermediate (WTI) crude for March delivery rose by 60 cents, or 0.8%, to $76.45 a barrel on the New York Mercantile Exchange.
- April Brent crude, the global benchmark, increased by 74 cents, or 0.9%, reaching $81.29 a barrel on ICE Futures Europe.
Market Drivers
Despite a slump on Wednesday due to unexpected increases in U.S. crude and gasoline inventories, both WTI and Brent experienced monthly gains for the first time since September.
Traders are preparing for the U.S. response to a drone attack by Iran-backed militants that resulted in the death of three U.S. troops in Jordan over the weekend.
Government data from Wednesday revealed that U.S. crude production has rebounded by 700,000 barrels a day, reaching a daily output of 13 million barrels. Previous cold weather conditions in North Dakota and Texas had negatively affected production last month, thus supporting higher crude prices.
According to analysts at Sevens Report Research, if the remaining production is not restored in the next few weeks, there could be a weekly deficit of 2.1 million barrels compared to early year levels. This prolonged deficit would further enhance bullish sentiments in the market.