LONDON: Oil prices hit seven-week highs on Wednesday as summer demand optimism and concerns over escalating conflicts offset an industry report that said US crude inventories unexpectedly rose.

Brent crude futures gained 23 cents, or 0.3 per cent, at $85.56 a barrel by 1525 GMT, while US West Texas Intermediate crude was up 18 cents, or 0.2pc, at $81.75 per barrel.

“The current snapshot presents an underwhelming picture but there are green shoots that indicate a more optimistic outlook,” said Tamas Varga of oil broker PVM.

The Brent price being $8 over the lows hit in early June “shows genuine optimism that the global oil balance will eventually tighten,” Varga added.

Both benchmarks, having recovered strongly in the last two weeks, gained more than $1 in the previous session to seven-week peaks after a Ukrainian drone strike led to an oil terminal fire at a major Russian port.

Published in Dawn, June 20th, 2024