Oil rises on Red Sea attacks, copper tariff concerns, lower US production
Oil prices climbed on Wednesday, maintaining their highest levels since June 23, lifted by attacks on shipping in the Red Sea, along with concerns over steep U.S. tariffs on copper and a forecast for lower U.S. oil production.
Brent crude futures gained 48 cents, or 0.7%, to $70.63 a barrel by 0855 GMT. U.S. West Texas Intermediate crude was up 51 cents, or 0.8%, to $68.84 a barrel.
After months of calm in the Red Sea, attacks in the major global shipping lane were renewed in the past week, which sources attribute to Yemen's Iran-allied Houthi militia.
A mission was under way on Wednesday to rescue the crew from a cargo ship which sank in the Red Sea following an attack that killed at least four crew members. The Houthis have not claimed responsibility for the attack.
Oil prices were also buoyed by an Energy Information Administration forecast on Tuesday that the U.S. will produce less oil in 2025 than previously expected, as declining oil prices have prompted U.S. producers to slow activity.
On Tuesday, U.S. President Donald Trump said he would announce a 50% tariff on copper, aiming to boost U.S. production of a metal critical to electric vehicles, military hardware, the power grid and many consumer goods.
The announcement came as Trump delayed a deadline for some tariffs to August 1, providing some hope to major trade partners that deals to ease duties could still be reached, though that left many companies still uncertain on the path forward.
While there is concern that the tariffs could curb demand for oil, more immediately there was strong travel demand during the U.S. July 4 holiday weekend, while data also showed possible crude inventory builds in the U.S. of around 7.1 million barrels.
With the Red Sea strikes and higher U.S. holiday fuel consumption during summer, "the idea of ample future supply must give way to short-term considerations," said a research note from oil broker PVM.
Official inventories data from the U.S. Energy Information Administration is scheduled for release at 1430 GMT.
OPEC+ oil producers were set for another big output boost for September as they complete both the unwinding of voluntary production cuts by eight members, and the United Arab Emirates' move to a larger quota, five sources said.
This followed a Saturday announcement from the group approving a 548,000 barrels per day supply increase for August.
Source: Reuters
