Oil hold to gains as market monitors OPEC+ policy, geopolitical tensions

Crude oil futures on Wednesday clung to recent gains as mounting geopolitical tensions and OPEC+ policy lift prices.

The West Texas Intermediate contract for May delivery gained 28 cents, or 0.33%, to settle at $85.43 a barrel. The Brent contract for June delivery added 43 cents, or 0.48%, to settle at $89.35 a barrel. Crude futures are at their highest level since late October.

Some members of OPEC and allies led by Russia, called OPEC+, are voluntarily cutting 2.2 million barrels per day of production through at least the second quarter.

The group’s Joint Ministerial Monitoring Committee concluded a meeting Wednesday without recommending changes to OPEC+ current production policy, according to two delegates. The committee can only make recommendations for OPEC+ to consider at a formal meeting.

The rise in oil prices Wednesday was blunted by a build in U.S. crude stockpiles. Commercial inventories, which exclude the strategic petroleum reserve, increased by 3.2 million barrels last week, according to the Energy Information Administration.

U.S. crude and the global benchmark have rallied about 20% and 16% this year as improving economic growth expectations should push the oil market into a 450,000 barrel per day deficit in the second and third quarters, according to Bank of America.

Crude oil gained this week on mounting geopolitical tensions. Ukraine continued its campaign of drone strikes against Russian energy infrastructure, hitting the country’s third-largest oil refinery.

And OPEC member Iran vowed to respond against Israel, accusing the country of bombing its consulate in Damascus and killing seven officials of the Islamic Revolution Guards Corps.

The escalating tensions between Israel and Iran have raised fears again of a wider war in the Middle East that could disrupt crude supplies.

— CNBC’s Ruxandra Iordache contributed to this report.