LONDON – Oil prices steadied near two-year highs Thursday, with investors eyeing geopolitical tensions in major oil producing countries which have sent prices soaring in recent weeks.
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Brent crude, the global oil benchmark, eased 0.1% to $63.41 a barrel on London's ICE Futures exchange. On the New York Mercantile Exchange, West Texas Intermediate futures were unchanged at $56.81 a barrel.
Oil prices have risen more than 4% over the past week, partly due to a corruption crackdown in major producer Saudi Arabia, where Crown Prince Mohammed bin Salman had dozens of princes, ministers and prominent businessmen detained.
"The oil rally continues as the Saudi power consolidation adds to existing geopolitical concerns," said Norbert Rucker, head of macro and commodity research at Julius Baer.
The events in Saudi Arabia follow increased tensions in other oil producers including Iran, Venezuela and Iraq, adding to supply concerns, which have helped drive up prices.
"Risks of both production disruptions and political instability have sharply increased among some of the largest oil producers," said Goldman Sachs analysts in a note. The bank maintained its year-end Brent price forecast of $58 a barrel.
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An unexpected rise in U.S. oil stocks wasn't enough to derail the rally.
Data published by the Energy Information Administration on Wednesday showed U.S. oil inventory rose 2.2 million barrels in the week ended Nov. 3.
Investors are awaiting a meeting between the Organization of the Petroleum Exporting Countries and other major producers on Nov. 30, where an extension to the deal to cut production until March 2018 is expected to be discussed.
"The oil market appears to be pricing in an extension of OPEC's current production cut agreement for all of 2018...However, ensuring compliance is at or above 100% will be all the more essential in 2018 as non-OPEC supplies are expected to recover strongly next year," said Emirates NBD Bank in a note.
Nymex reformulated gasoline blendstock--the benchmark gasoline contract--fell 0.1% to $1.82 a gallon. ICE gasoil changed hands at $561.75 a metric ton, down $1.00 from the previous settlement.
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(END) Dow Jones Newswires
November 09, 2017 06:10 ET (11:10 GMT)