20.12.202319:14:00UTC+00Oil Futures Settle Higher Again

Oil prices climbed higher on Wednesday on concerns about trade disruptions due to rising tensions in the Middle East after attacks on vessels in the Red Sea by Houthi forces.

Data showing an unexpected increase in U.S. crude inventory limited the uptick in oil prices.

West Texas Intermediate Crude oil futures for January ended higher by $0.28 or about 0.4% at $74.22 a barrel.

Brent crude futures settled at $79.70 a barrel, gaining $0.47 or about 0.6%.

"Oil prices are continuing to rebound today, with the risk of disruptions in the Red Sea potentially contributing to the jump we've seen recently," says Craig Erlam, Senior Market Analyst at OANDA, U.K. & EMEA. "With markets pricing in so many rate cuts now, that could boost the global economy next year and by extension demand."

Data released by the Energy Information Administration (EIA) showed crude inventory increased 2.9 million barrels in the week ended December 15, as against forecast for a drop of 2.3 million barrels.

The EIA data also showed gasoline stockpiles rose by 2.7 million barrels last week, higher than an expected increase of 1.2 million barrels.

The American Petroleum Institute's report on Tuesday showed an increase of 0.939 million barrels of crude oil in U.S. inventories for the week ending Dec. 15, defying expectations for a draw of 2.2 million barrels.

Traders and shippers braced for the prospect of more disruption in the Red Sea after Yemen's pro-Palestinian Houthi movement vowed to defy a U.S.-led naval mission and keep hitting Israeli targets in the Red Sea.

So far, shippers have reportedly diverted about more than $30 billion worth of cargo away from the Red Sea as a direct result of more than a dozen Houthi attacks in the Red Sea.