Oil prices gain 1.5pc on increasing concerns of Iran attack

Oil prices increased 1.5 percent on Thursday, marking the third consecutive day of gains, as concerns about a possible military attack by the US on Iran, a major Middle Eastern oil producer, continue to rise.

Brent crude futures increased 94 cents, or 1.4 percent, to $69.34 a barrel at 07:30 GMT. US West Texas Intermediate crude futures also increased 92 cents, or 1.5 percent, to $64.13 a barrel.

Both Brent and US crude futures have increased around 5 percent since Monday and are at their highest level since September 29.

Oil prices are surging as US President Donald Trump has continued to put pressure on Iran to abandon its nuclear program through military threats and as a US naval fleet has entered the region. Iran is the fourth-largest producer of the Organization of the Petroleum Exporting Countries, producing 3.2 million barrels per day.

US President Donald Trump is considering plans to attack Iranian security forces and leaders to encourage Iranian protests that could lead to the overthrow of the current government, according to Reuters, citing US officials familiar with the matter.

"The key driver for oil prices is still the geopolitical risk premium related to Iran and the Middle East, although unplanned outages in Kazakhstan and the US (Winter Storm Fern) have had a temporary effect as well," DBS Bank's lead energy sector analyst Suvro Sarkar said in an email.

The massive Tengiz oil field in Kazakhstan is being brought back on line in phases after electrical fires reduced production last week, with the goal of reaching full production within a week.

In the US, the world's largest oil producer and the largest exporter of liquefied natural gas, oil and gas producers were working to bring wells back on line after disruptions from severe cold from Winter Storm Fern, which hit over the weekend.

A surprise decline in US crude stocks, which temporarily alleviated worries about excess supply, also helped push prices higher, said Phillip Nova's senior market analyst Priyanka Sachdeva.

US crude stocks declined 2.3m barrels to 423.8m barrels in the week ended Jan. 23, the Energy Information Administration said Wednesday, versus a forecast in a Reuters poll for a 1.8m barrel increase.

Analysts are also predicting prices to rise due to the Iranian issues.