2017.10.1803:05:00UTC+00Oil Prices Climb on Tighter U.S. Market, Disruption Risks

Prices of oil rallied on Wednesday, propped up by a drawdown in U.S. crude stockpiles and worries that tensions in the Middle East could interrupt production and impact supplies.

Brent crude futures rose 39 cents or 0.7 percent from their last settlement to trade at $58.27 per barrel. The international benchmark for oil prices are also trading a third above mid-year levels.

Meanwhile, U.S. WTI crude futures stood at $52.13 per barrel, higher by 25 cents or 0.5 percent and almost a quarter higher than the mid-June levels.

Traders stated that on charts for WTI a technical pattern called the 'Golden Cross' was looming, which is perceived as a bullish price indicator.

According to traders, prices were lifted by a decline in U.S. crude inventories, as well as worries that the fighting in Iraq and increasing tensions between the U.S. and Iran could impact supplies.

In the week to October 13, API reported U.S. crude inventories declined by 7.1 million barrels to 461.4 million barrels. Official data for U.S. fuel inventory data is scheduled to be released later today from the EIA.

Aside from the positive supply data from the U.S. market, tensions in the Middle East also attached a risk premium into oil markets.

Iraqi government troops has managed to take control of the majority of the Kurdish-controlled oil city of Kirkuk earlier this week, an offensive prompted by a controversial Kurdish independence referendum and there are worries that the fighting could impact supply flows.