Oil prices rose on Friday and were headed for strong gains in June as fears of supply disruptions in Russia and the Middle East largely offset concerns over slowing demand. This notion also saw oil prices rise past data this week which showed an unexpected increase in U.S. stockpiles. Gasoline inventories also rose despite the onset of the travel-heavy summer season.
Brent and WTI futures gain
Brent oil futures expiring in August rose 0.4 percent to $86.73 a barrel, while West Texas Intermediate crude futures rose 0.4 percent to $82.09 a barrel by 21:43 ET (01:43 GMT). Prices also largely shrugged off pressure from a strong dollar, with focus now turning to key upcoming U.S. inflation data for more economic cues.
Geopolitical tensions drive prices higher
Brent and WTI contracts were set to gain more than 6 percent each in June, as fears of a wider war in the Middle East kept markets on edge over disruptions in crude supplies. Attacks by Ukraine on major Russian fuel refineries also pointed to potential disruptions in oil supplies from Moscow. The geopolitical conflicts saw traders attach a higher risk premium to oil prices, and also pushed up the prospect of tighter markets in the coming months, due to disruptions in oil supplies.
Supply disruptions from weather and regulatory action
Adverse weather conditions also pointed to more potential supply disruptions, amid heavy rains in Ecuador and a potential hurricane in the Gulf Coast. The U.S. Senate budget committee on Thursday launched a probe into 14 domestic producers, including Exxon Mobil Corp, Chevron Corp and ConocoPhillips over potentially coordinating with the Organization of Petroleum Exporting Countries in manipulating oil prices.
Read more: Oil prices fall amid dollar strength; U.S. inventory build spurs demand fears
OPEC maintains production cuts
The OPEC cut production repeatedly over the past year to shore up oil prices, although the move had only provided limited support to crude markets. But prices were buoyed by the cartel stating after a June meeting that it will maintain current levels of production to keep prices supported through 2024.
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