Crude oil prices advanced to a seven-week high Thursday, helped by firmer Asian stock markets and geopolitical tensions.
Light sweet crude for August delivery gained 0.88 percent or 79 cents to $90.66 a barrel, the highest since May 30, in electronic trading on the New York Mercantile Exchange during Asian trading hours. Brent crude oil futures for September delivery rose 0.88 percent or 85 cents to $106.01 a barrel on the ICE futures exchange in London.
Geopolitical fears were reinforced after Israel accused Iran of carrying out a bomb attack that killed six people on a bus carrying Israeli tourists at a Bulgarian airport Wednesday, and vowed a stern response to the Iranian terror. A rebel suicide bombing at Syria's security headquarters Wednesday killed defense minister and President Bashar al-Assad's brother-in-law Assef Shawkat and a top general.
Firmer trend in the Asian stock markets added support to oil prices. Stocks rallied across as signs of an improvement in the U.S. housing market and better-than-expected quarterly earnings from corporate majors buoyed the sentiment. Official data showed that the U.S. housing starts rose more than expected in June to its fastest pace in almost four years, suggesting that the housing market recovery was gaining some traction.
Crude continues to show upside bias after the (second-quarter) sell-off, with the economy slowing seeming to be priced in and geopolitical worries and the gasoline draw down supportive, Gene McGillian, analyst at Tradition Energy in Stamford, told Reuters.
Oil prices advanced Wednesday as violence in Syria and tensions with Iran reinforced geopolitical fears and the U.S. Energy Information Administration weekly inventory report showed that average oil demand increased last week in the U.S. for the third week in a row. Light sweet crude for the August delivery gained 65 cents and settled at $89.87 a barrel on the New York Mercantile Exchange while Brent crude oil raised $1.16 to settle at $105.16 a barrel.