The conflict in Gaza and the Russia-Ukraine war have pushed up oil prices. / Photo: AP

Oil prices have increased after reaching five-month highs due to strong demand forecasts in the US, the world's biggest oil consumer, and rising concerns over global oil supply routes in the Middle East.

International benchmark Brent crude traded at $89.07 per barrel at 12pm local time (0900 GMT), a 0.17% increase from the closing price of $88.92 per barrel in the previous trading session.

The American benchmark West Texas Intermediate (WTI) traded at $85.19 per barrel at the same time, a 0.05% rise from the previous session that closed at $85.15 per barrel.

Oil prices tested the highest levels of the last five months due to conflicts between Israel and Palestine and the Russia-Ukraine war.

Tensions in the Middle East

The possibility of a further decline in Russian oil exports continues to support higher prices.

Furthermore, a missile strike targeting the Iranian Consulate in the Syrian capital, Damascus, resulting in the killing of a top commander of Iran's Islamic Revolutionary Guard Corps (IRGC) and six other officers, is exacerbating tensions in the Middle East, where busy energy supply routes are located.

American Petroleum Institute (API) data released late on Tuesday showing a decrease of 2.3 million barrels in US crude oil inventories, against the market expectation of a draw of 2 million barrels, signalled healthy demand and drove prices up.

However, geopolitical unrest and the decline in US crude inventories prompted profit-taking by investors, limiting upward price movements ahead of the OPEC group meeting that will be held later on Wednesday.

Under pressure

Analysts predict that the group will refrain from making any changes to its future production policy.

Official statistics from the Energy Information Administration (EIA) will be released later in the day, and if a buildup in crude and petrol stockpiles is predicted, prices will come under pressure.

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