SINGAPORE (APP) – Oil prices rose in Asian trade Thursday as Europe struck back against the Islamic State (IS) group after the Paris attacks and US crude stockpiles registered a mild rise, analysts said.
The Federal Reserve’s broadly upbeat summary of the US economy also lifted confidence, with most markets in Asia advancing after a rally on Wall Street.
“Strikes against the Islamic State could worsen the geopolitical tensions in the oil-producing Middle East region and this supports crude prices,” said Sanjeev Gupta, who heads the Asia-Pacific oil and gas practice at professional services organisation EY.
At around 0615 GMT, US benchmark West Texas Intermediate for December delivery was up 19 cents at $40.94, while Brent crude for January was 40 cents higher at $44.54.
European countries have elevated their security alert levels as French and Russian air strikes pound an IS stronghold in Syria and French security forces mount operations against remnants of a group that carried out last week’s deadly attacks in Paris.
In Singapore, EY analyst Gupta said a global supply glut and fears of a slowing European economic recovery were persisting, putting downward pressure on prices.
On Wednesday, US Department of Energy oil data showed a modest rise in commercial crude stockpiles in the world’s top oil consumer.
Crude inventories rose 300,000 barrels to 487.3 million in the week ended November 13, well below expectations that it would rise by up to two million barrels.
Gupta said the market will keep a close eye on developments between IS and major powers, as well as expectations of a US interest hike in December.
Minutes from the Fed’s October policy meeting showed “most participants” expected conditions to be right for an interest rate rise by their December gathering, having broadly dropped their worries about the global economy.
“China’s November economic data to be released next week may also impact the crude prices,” he added.