Investing.com - Crude oil prices settled sharply higher as concerns over a massive build in crude stockpiles were offset by rising geopolitical tensions in the Middle East and expectations of U.S. military intervention in Syria.
On the New York Mercantile Exchange crude futures for May delivery rose 2% to settle at $66.82 a barrel, while on London's Intercontinental Exchange, Brent rose 1.56% to trade at $72.15 a barrel.
The prospect of crude supply disruptions in the Middle East remained front and centre Wednesday as Reuters reported Saudi Arabia's air defense forces intercepted at least three ballistic missiles fired at Saudi cities by Yemen's Houthis.
That came as crude oil prices jumped sharply earlier on the back of a tweet from President Donald Trump, which was said to have stoked fears about conflict between the U.S. and Russia in Syria.
Crude prices did, however, retreat from their highs of $67.42 a barrel heading into settlement as focused shifted to a bearish report from the Energy Information Administration (EIA).
Inventories of U.S. crude rose by 3.306 million barrels for the week ended April 6, confounding expectations for a modest decline of 600,000 barrels, according to data from the EIA.
The build in crude inventories came amid an uptick in domestic production, much lower crude exports and a large increase in crude imports of 752,000 barrels per day week-on-week to 8.7 million barrels.
Crude output rose by a 65,000 barrels a day, the EIA said, while crude product inventories such as gasoline rose amid an uptick in refinery activity.
Gasoline inventories – one of the products that crude is refined into – rose by 458,000 barrels, missing expectations for a decline of 1.425 million barrels, while supplies of distillate – the class of fuels that includes diesel and heating oil – fell by 1.044 million barrels, beating expectations for a rise of 29,000 barrels.
The strong start to the week for crude prices comes ahead of monthly reports from OPEC and the International Energy Agency, slated for Thursday and Friday, respectively.