Oil prices rise as investors monitor US-Iran negotiations

Oil prices edged higher on Thursday, remaining near seven-month peaks as market participants evaluated the likelihood of diplomatic efforts between the United States[Country:{"assets":{"country":"US"}}] and Iran[Country:{"assets":{"country":"IR"}}] preventing a military confrontation. While supply risks remain a primary driver, the market's upward momentum was checked by a significant surge in American crude stockpiles. Brent futures climbed 27 cents, or 0.3%, to $71.12 per barrel, while West Texas Intermediate (WTI) rose 23 cents, or 0.4%, to $65.65. Both contracts have maintained these elevated levels as the U.S. positions military assets in the Middle East to encourage negotiations regarding Tehran's nuclear and missile programs. U.S. representatives Steve Witkoff and Jared Kushner are slated to meet an Iranian delegation for a third round of discussions in Geneva. Toshitaka Tazawa, an analyst at Fujitomi Securities, noted that the focus remains on whether conflict can be avoided. > Even if hostilities were to break out, provided the targets were limited and the conflict short-lived, WTI would likely rise temporarily to above $70 a barrel before retreating to the $60–$65 range. An escalation could severely impact exports from the region, including those from Saudi Arabia[Country:{"assets":{"country":"SA"}}]. The kingdom is reportedly increasing its output as a safeguard against potential supply gaps. Companies involved in the regional energy infrastructure, such as Saudi Aramco Base Oil Company - Luberef[Symbol:{"assets":{"symbol":"2223.SR"}}], are closely watched as the market assesses the stability of Middle Eastern supply chains. The OPEC+ group, which includes Russia[Country:{"assets":{"country":"RU"}}], is considering a production hike of 137,000 barrels per day for April. This adjustment aims to meet rising summer demand while balancing the price volatility caused by geopolitical tensions. Capping the day's gains, the Energy Information Administration reported that U.S. crude inventories jumped by 16 million barrels last week. This figure represents the largest build in three years and far exceeded the 1.5-million-barrel increase anticipated by analysts.