New York: Oil prices moved slightly higher on Tuesday, supported by strong economic growth in the United States and renewed concerns over global supply risks, even as rising inventories limited sharper gains.
Brent crude and US West Texas Intermediate held near recent highs after a steady rally in the past few sessions. Market sentiment was lifted by data showing that the United States economy expanded at its fastest pace in about two years during the third quarter, driven by solid consumer spending and exports. The data strengthened expectations that fuel demand will remain firm in the world’s largest oil consumer.
At the same time, supply worries continued to influence prices. Traders are closely watching the impact of tighter US measures affecting Venezuelan oil exports and ongoing geopolitical tensions linked to the Russia Ukraine conflict, which have raised concerns about possible disruptions to global energy supplies.
However, gains were capped by signs of ample supply. Industry data showed an increase in US crude inventories, suggesting that production remains strong despite the recent rise in prices. Analysts said this reflects a market that is still well supplied, even as demand expectations improve.
US drilling activity also showed early signs of picking up, with producers adding oil and gas rigs for the first time in several weeks. While the overall rig count remains lower than last year, the increase points to cautious optimism among producers as prices stabilise.
Looking ahead, analysts expect oil prices to remain supported in the short term by economic strength and geopolitical risks. However, concerns about oversupply and inventory builds are likely to prevent a sustained rally, keeping prices range bound as the year draws to a close.