Singapore — Crude rises on geopolitical tensions despite stock build 0250 GMT: Crude oil futures were higher during mid-morning trade in Asia Thursday amid increasing geopolitical tensions in the Middle East despite a build reported in US crude stocks last week.
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At 10:50 am Singapore time (0248 GMT), July ICE Brent crude futures were up 48 cents/b (0.67%) from Wednesday's settle to $72.25/b, while the NYMEX June light sweet crude contract gained 48 cents/b (0.77%) at $62.50/b.
Saudi Arabia has blamed Iran for this week's attacks on its pipeline, escalating a war of words that threatens vital oil and natural gas exports from the world's primary producing region.
In a letter to the UN Security Council, Saudi Arabia said Iran and the Houthi rebels in Yemen, which Iran has backed, were responsible for a drone attack Tuesday on the country's East-West Pipeline that caused it to be shut down, Saudi-owned Al Arabiya channel reported Wednesday.
"Tension remains high, with the US pulling out non-emergency personnel from its embassy in Iraq citing threats from Iranian-backed forces," ANZ analysts said in a note Thursday.
The incidents have not impacted Saudi and UAE oil production or exports, according to officials. However, the countries are on high alert for further attacks on key infrastructure, with the UAE saying it was beefing up maritime security as a precautionary measure.
"Rising tensions with Iran could cause a big oil price spike. Drone attacks on Saudi pipelines and US intelligence reports of potential new targets is keeping risks high," Price Futures Group's senior market analyst Phil Flynn said.
State-owned Saudi Aramco's 1,200-km (744-mile) East-West Pipeline was temporarily shut as a precautionary measure Tuesday following the drone attack that caused a fire at a pumping station, as the company works on restoring operations.
Aramco could not be reached Wednesday for comments on repair work.
Meanwhile, commercial crude stocks in the US for the week ended May 13 rose 5.43 million barrels to 472.04 million barrels, as a 919,000 b/d increase in imports offset higher refinery runs, an analysis of US Energy Information Administration data showed Wednesday.
Although the report on crude stocks were bearish a drop reported in US gasoline inventories helped to offset the build, analysts said.
US gasoline inventories fell 1.12 million barrels last week to 225.02 million barrels, the EIA data showed.
"The weekly EIA report showed that gasoline stockpiles fell by 1.12 million barrels, which was over four times the fall investors were expecting. This helped offset a 5.43 million barrel increase in crude oil stockpiles," ANZ analysts said.
Elsewhere, the International Energy Agency in its official market report released Wednesday said that global oil supply uncertainties including Middle East tensions are "being managed," with other producers stepping in to replace lost Iranian output.
The IEA said "solid gains" in production from Libya, Nigeria and the US had offset production falls in April from a range of countries, including Azerbaijan, Canada, Iran and Kazakhstan. However, total global oil supply had fallen by 300,000 b/d in April to 99.3 million b/d, it estimated.
As of 0250 GMT, the US Dollar Index was down 0.04% at 97.365.
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