Oil prices edged higher on Thursday as investors focused on high-level talks between U.S. President Donald Trump and Chinese President Xi Jinping in Beijing amid persistent concerns over supply disruptions linked to the ongoing Iran conflict.
Brent crude oil, against which Nigerian crude oil is priced, rose by 45 cents to $106.08 per barrel, while U.S. West Texas Intermediate crude gained 41 cents to trade at $101.43 per barrel during Thursday’s session.
The market remained volatile after both oil benchmarks settled lower on Wednesday due to fears that rising fuel prices could fuel inflationary pressures and trigger additional U.S. interest rate hikes.
Brent crude had settled down 2 percent at $105.63 a barrel, while WTI crude declined 1.14 percent to close at $101.02 a barrel.
Investors are closely monitoring the Trump-Xi summit for potential diplomatic progress that could help ease tensions surrounding the Iran conflict, which has significantly disrupted oil flows through the Strait of Hormuz.
Reuters reported that only limited tanker traffic has passed through the strategic waterway since the conflict escalated earlier this year, intensifying concerns over global supply security.
The International Energy Agency has also warned that global oil supply may fall below demand this year as inventories continue to decline amid prolonged geopolitical tensions in the Middle East.
Analysts said traders are now balancing geopolitical risks against concerns that sustained high oil prices could weaken global economic growth and reduce fuel demand.
Meanwhile, U.S. crude and gasoline inventories fell more than expected last week as exports increased, according to data from the U.S. Energy Information Administration.
Reuters said U.S. crude exports rose by 742,000 barrels per day to 5.49 million barrels daily during the week under review.
The oil market has remained highly sensitive to developments surrounding the Iran conflict and the status of the Strait of Hormuz, which handles roughly one-fifth of global oil shipments.
Analysts believe any breakthrough from the Trump-Xi discussions could influence near-term oil price direction and broader market sentiment across global energy markets.
