Brent gains on the back of heightened geopolitical tensions

The front-month ICE Brent contract has gained by $0.15/bbl on the day, to trade at $67.20/bbl at 09.00 GMT.

IMAGE: Oil market reports. Getty Images

Upward pressure:

Brent crude’s price has moved higher due to a knee-jerk risk premium added to the market after Poland intercepted Russian drones breaching its airspace yesterday.

The development marks the first time a NATO member has directly intervened in the Russia-Ukraine war, now in its third year.

“The incursion of Russian drones into Polish airspace raised concerns that the US would retaliate with further restrictions on Russia’s energy supplies,” remarked ANZ Bank’s senior commodity strategist Daniel Hynes.

Downward pressure:

Brent’s price has felt some downward pressure after the US Energy Information Administration (EIA) reported an increase in US crude stocks.

Commercial US crude oil inventories have gained by 3.9 million bbls to touch 425 million bbls for the week ending 5 September, according to data from the EIA.

A rise in US crude stocks can indicate lower demand for oil and put some downward pressure on Brent's price, according to market analysts.

By Aparupa Mazumder

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