Oil Prices Reached its Highest in Six Months with Supply Concerns

Brent oil prices reached its highest in six months with fears of crude inventory disruption from Iran and other producers in Africa and the Middle East overshadowing worries about the economic condition globally.

Recent data that showed a surprising decline in the oil supply of the United States influenced strong futures of crude which had reduced gains after Iran’s oil ministry denied a report by the state media saying that Tehran had prohibited exporting oil to six countries of the European Union as a way to retaliate on the sanctions imposed on them.

Based on recent data, ICE Brent crude prices for April delivery rose by $1.25 to reach $118.60 per barrel. Prior to this, it has reached its peak intra-day cost since the 1st of August at a crude price of $119.99 per barrel.

United States crude oi price per barrel for March delivery gained 85 cents to reach $101.59, a reduction of an earlier high intraday amount of $102.54 since the 12th of January.

Crude oil supply in the United States posted a surprising decrease of 171,000 barrels in the recent week. This did not coincide with the expectation of a Reuters of an increase amounting to 1.5 million barrels and this defied a recently released data presenting a growth of 2.9 million barrels.

Crude inventories at the U.S. delivery hub in Cushing, Oklahoma reached its highest quantity since the month of September as it posted a stock build amounting to 2 million, the largest weekly growth since December of 2009.

The growth in supply at Cushing helped expand the premium between Brent and U.S crude investment to almost $17 per barrel. The difference lately dropped to $16.27.

Syria’s pipeline was recently hit by an explosion. An assault in Yemen has stopped production in its biggest oilfield. Sudan held more oil from South Sudan in a battle over payment concerns.

Market forces weighing on the crude oil price are currently favoring the supply side as opposed to any downside risk that may come out of the Eurozone, despite Greece’s second bailout falling through.

The risks of oil inventories far outweigh the impact of the debt problems in Europe which is further highlighted by the continuously unresolved attempt of Greece to get a debt bailout for the second time.