Oil climbs as US-Iran tensions keep supply risks in focus

Core Insights - Oil prices are rising, nearing seven-month highs, driven by U.S.-Iran tensions and potential supply disruptions, although gains are limited by increasing U.S. crude inventories [1][2][7] Oil Prices and Market Reactions - Brent futures are trading at $71.12 per barrel, up 0.3%, while WTI futures are at $65.65, up 0.4% [2] - Both Brent and WTI reached their highest levels since July 31, with Brent gaining 8 cents and WTI falling 21 cents in the previous trading session [2] U.S.-Iran Negotiations - U.S. envoy Steve Witkoff and Jared Kushner are set to meet with an Iranian delegation for further negotiations, with investors closely monitoring the potential for military conflict [3] - Iranian Foreign Minister Abbas Araqchi indicated that a deal with the U.S. is possible if diplomacy is prioritized [5] Supply Concerns and OPEC+ Response - An extended conflict could disrupt oil supplies from Iran, a major crude producer, prompting Saudi Arabia to increase oil production and exports as a contingency plan [4][5] - OPEC+ is considering raising oil output by 137,000 barrels per day for April in anticipation of peak summer demand and to address tensions in the region [6] U.S. Crude Inventory Impact - U.S. crude inventories rose by 16 million barrels last week, the largest increase in three years, significantly exceeding analysts' expectations of a 1.5 million barrel rise, which is capping oil price gains [7]