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New York, US (BBN) – Crude oil prices gained in Asia on Monday with tensions on the Korean peninsula in focus along with the fallout from a missile strike by US forces last week on a Syrian airbase that drew a sharp rebuke from Iran and Russia.
On the ICE Futures Exchange in London, Brent oil for June delivery was last quoted up 0.38 per cent to $55.44 a barrel, reports
Elsewhere, the US West Texas Intermediate crude May contract rose 0.42 per cent to $52.53 a barrel.
Last week, oil futures settled higher for the fourth session in a row on Friday, extending a rally to the strongest level in around a month after two US destroyers based in the Eastern Mediterranean fired 59 Tomahawk cruise missiles at a Syrian air base, which the US said was in retaliation to Bashar al-Assad’s alleged use of chemical weapons against his own people.
Oil pared some of the gains later in the session as concerns about a wider escalation in the region faded and US economic data weighed on global markets.
But analysts said the initial knee-jerk reaction to the airstrike may have been overdone given Syria’s role as a very minor oil producer and after US officials described the attack as a one-off event that would not lead to wider escalation.
Meanwhile, oil traders continued to focus on the ongoing rebound in US shale production, which could derail efforts by other major producers to rebalance global oil supply and demand remained in focus.
Oilfield services provider Baker Hughes said late Friday that the number of active US rigs drilling for oil rose by 10 last week, the 12th weekly increase in a row.
That brought the total count to 672, the most since September 2015.
Earlier in the week, the US Energy Information Administration said that crude oil inventories increased by 1.57 million barrels to yet another all-time high of 535.5 million.
It was the 13th weekly build in US stockpiles in the past 15 weeks, feeding concerns about a global glut.
Market participants, however, remained optimistic that OPEC would extend its current deal with non-OPEC producers to cut output beyond June in an effort to rebalance the market.
In November last year, OPEC and other producers, including Russia agreed to cut output by about 1.8 million barrels per day between January and June.
A joint committee of ministers from OPEC and non-OPEC oil producers will meet in late April to present its recommendation on the fate of the pact.
A final decision on whether or not to extend the deal beyond June will be taken by the oil cartel on May 25.
Investors will keep an eye out for monthly reports from the Organization of Petroleum Exporting Counties and the International Energy Agency to gauge global supply and demand levels.