Oil prices rise, set for strong June amid geopolitical risks

Investing.com-- Oil prices rose in Asian trade on Friday and were headed for strong gains in June as fears of supply disruptions in Russia and the Middle East largely offset concerns over slowing demand.

This notion also saw oil prices rise past data this week which showed an unexpected increase in U.S. stockpiles. Gasoline inventories also rose despite the onset of the travel-heavy summer season. 

Brent oil futures expiring in August rose 0.4% to $86.73 a barrel, while West Texas Intermediate crude futures rose 0.4% to $82.09 a barrel by 21:43 ET (01:43 GMT). 

Prices also largely shrugged off pressure from a strong dollar, with focus now turning to key upcoming U.S. inflation data for more economic cues.

Crude set for June gains amid supply risks 

Brent and WTI contracts were set to gain more than 6% each in June, as fears of a wider war between Israel and Lebanon’s Hezbollah kept markets on edge over disruptions in crude supplies.

Attacks by Ukraine on major Russian fuel refineries also pointed to potential disruptions in oil supplies from Moscow. 

The geopolitical conflicts saw traders attach a higher risk premium to oil prices, and also pushed up the prospect of tighter markets in the coming months, due to disruptions in oil supplies.

Adverse weather conditions also pointed to more potential supply disruptions, amid heavy rains in Ecuador and a potential hurricane in the Gulf Coast.

U.S. producers face probe over OPEC collusion 

The U.S. Senate budget committee on Thursday launched a probe into 14 domestic producers, including   Exxon Mobil   Corp (NYSE:XOM),   Chevron   Corp (NYSE:CVX) and ConocoPhillips (NYSE:COP) over potentially coordinating with the Organization of Petroleum Exporting Countries in manipulating oil prices.

The OPEC cut production repeatedly over the past year to shore up oil prices, although the move had only provided limited support to crude markets. 

But prices were buoyed by the cartel stating after a June meeting that it will maintain current levels of production to keep prices supported through 2024.