Oil held steady on Wednesday as U.S.–Iran talks continued, with lingering geopolitical uncertainty helping to underpin prices.
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Oil prices gained about 2% on Wednesday, buoyed by potential supply risks should tensions between the U.S. and Iran escalate, while draws of crude from key stockpiles suggested stronger demand.
Brent crude oil futures were up $1.39, or 2.02%, at $70.19 a barrel by 10:09 a.m. ET. U.S. West Texas Intermediate crude rose $1.34, or nearly 2.1%, to $65.30.
"Ongoing tensions in the Middle East continue to support prices, although so far there has been no supply disruption," said UBS oil analyst Giovanni Staunovo.
U.S. President Donald Trump said on Tuesday he was considering sending a second aircraft carrier to the Middle East, even as Washington and Tehran prepare to resume negotiations aimed at averting a new conflict.
"While rhetoric remains belligerent at times, there are no signs, at least for now, of escalation, and the U.S. President believes that Iran will ultimately want to strike a deal on its nuclear missile programme," PVM Oil Associates analyst Tamas Varga said in a note.
A slightly weaker dollar was helping prices higher as well. A stronger U.S. currency hurts demand for dollar-denominated crude from foreign buyers.
Crude draws from the stocks held independently in the Amsterdam-Rotterdam-Antwerp (ARA) refining and storage hub and from Fujairah suggested a tight market, UBS' Staunovo said, which was also supporting prices.
In the wider market, OPEC left its supply-demand expectations for the oil market largely unchanged in its monthly report, but highlighted that global oil demand for the wider group's crude will drop by 400,000 bpd in the second quarter compared to the first.
Russian oil production edged down around 0.6% in January from December, per the report.
Egypt has directed international oil companies to double production by 2030, with existing contracts due to be revised to spur new investment, Energean International's country manager for Egypt told Reuters on Tuesday.
Traders are also waiting for weekly U.S. oil inventory data from the Energy Information Administration on Wednesday. U.S. crude inventories rose by 13.4 million barrels in the week ended February 6, market sources said, citing American Petroleum Institute figures on Tuesday.
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