Oil up 1% as Middle East tension offsets large US crude stocks build
FILE PHOTO: Oil platforms and pumpjacks at Lake Maracaibo, in Cabimas, Venezuela, January 26, 2026. REUTERS/Leonardo Fernandez Viloria/File Photo
NEW YORK, Feb 11 : Oil prices gained about 1 per cent on Wednesday, as investors worried about escalating tensions between Iran and the U.S., which were preparing to resume negotiations, while a weekly report showing a large build in U.S. crude inventories limited gains.
Brent crude oil futures settled 60 cents, or 0.87 per cent, higher at $69.40 a barrel. U.S. West Texas Intermediate crude gained 67 cents, or nearly 1.05 per cent, to $64.63.
"The market continues to be supported by the tension between the U.S. and Iran and the on-again, off-again talks that don't seem to lead to any resolution," said Andrew Lipow, president of Lipow Oil Associates.
TRUMP SAYS 'NOTHING DEFINITIVE' DECIDED ON IRAN
U.S. President Donald Trump said nothing definitive was decided during his meeting with Israeli Prime Minister Benjamin Netanyahu on Wednesday but that negotiations with Iran toward a deal would continue.
On Tuesday, Trump said he was considering sending a second aircraft carrier to the Middle East if a deal is not reached with Iran, even as Washington and Tehran prepared to resume talks.
U.S. and Iranian diplomats held indirect talks last week in Oman, amid a regional naval buildup by the U.S. threatening Iran. The date and venue of the next round of U.S.-Iran talks have yet to be announced.
"While rhetoric remains belligerent at times, there are no signs, at least for now, of escalation, and the U.S. President believes that Iran will ultimately want to strike a deal on its nuclear missile programme," PVM Oil Associates analyst Tamas Varga said in a note.
Also supporting oil prices, U.S. job growth unexpectedly accelerated in January and the unemployment rate fell to 4.3 per cent, the Labor Department said, signaling a healthy economy.
"A resilient labor market underpins demand for transport fuels, petrochemicals and power generation, reducing downside risks to US consumption at a time when macro sentiment had turned cautious," Rystad Energy said in a note, adding that "labor market stability reinforces the view that the demand picture is firming up."
Limiting price gains, the U.S. crude inventories rose by 8.5 million barrels to 428.8 million barrels last week, the Energy Information Administration said, far exceeding analysts' expectations in a Reuters poll for a 793,000-barrel rise.
"Domestic production came back with a vengeance and not that far off the all-time record," said Robert Yawger, director of energy futures at Mizuho.
In the wider market, OPEC left its oil supply-demand expectations largely unchanged in its monthly report, but highlighted that global oil demand for the wider group's crude will drop by 400,000 bpd in the second quarter compared to the first.
Russian oil production edged down around 0.6 per cent in January from December, per the report.
Egypt has directed international oil companies to double production by 2030, with existing contracts due to be revised to spur new investment, Energean International's country manager for Egypt told Reuters on Tuesday.
