Oil prices rose more than 1% on Thursday, reversing some of the previous session’s losses, as the Middle East conflict and reports of North Korean troops ready to help Russia in Ukraine kept traders on edge ahead of the U.S. presidential election.
Brent crude futures were up US$1.26, or 1.7%, to US$76.22 a barrel as of 0905 GMT. U.S. West Texas Intermediate crude futures climbed US$1.26, or 1.8%, to US$72.03.
Oil prices have gained about 4% this week after shedding more than 7% last week on concerns of oversupply and weak demand and a perceived calming of Middle East tensions.
“The opposing forces of economic anxiety, loose oil balance and potential war-related supply disruptions will ensure that no clear oil price direction emerges in the immediate future whilst the risk remains skewed to the downside in the medium term,” said Tamas Varga of oil broker PVM.
On Wednesday, the U.S. said for the first time it had seen evidence North Korea has sent 3,000 troops to Russia for possible deployment in Ukraine, a move that could mark a significant escalation in Russia’s war against its neighbour.
In the Middle East, an exchange of heavy fire between Israel and Hezbollah heightened supply concerns, as Israeli strikes also hit the Syrian capital Damascus early on Thursday, Syrian state media reported.
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That escalation comes as Washington makes a push for peace between Israel and Iran-backed groups Hezbollah and Hamas before the Nov. 5 U.S. presidential election that could alter both its Middle East and oil policy.
“Trump is leading over (Kamala) Harris based on current data from betting markets and Trump has proposed making the U.S. a major oil supplier,” said OANDA senior market analyst Kelvin Wong, adding that could depress prices.
