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Oil Prices Rise as Middle East Tension Supports Ahead of Inventory Data

Investing.com -- Oil prices traded higher on Tuesday as escalating tensions in the Middle East kept up supply-side risks and investors looked ahead to weekly U.S. inventory data.

New York-traded West Texas Intermediate crude futures gained 15 cents, or 0.3%, to $57.81 a barrel by 9:05 AM ET (13:05 GMT), while Brent crude futures, the benchmark for oil prices outside the U.S., traded up 22 cents, or 0.3%, to $64.33.

The tension in the face-off between Washington and Iran showed no signs of abating after Iran threatened on Monday to restart deactivated centrifuges and step up its enrichment of uranium to 20%, a move that further undermines the 2015 nuclear agreement that Washington abandoned last year.

BP (LON:BP) continued to shelter an oil tanker in the Persian Gulf Tuesday for fear of retaliation, according to a Bloomberg report. BP was worried the ship could be attacked by Iran, in response to the seizure by British forces of a tanker allegedly shipping Iranian crude to Syria last week.

U.S. President Donald Trump had warned Tehran over the weekend to “be very careful” about the resumption of enrichment but has otherwise appeared reluctant to use force against Iran, having cancelled a planned strike last month.

Trade disputes, which threaten to dent global demand for oil, appeared to be held in check on Tuesday. Top negotiators from the U.S. and China are expected to talk via phone this week in preparation for face-to-face meetings in Beijing.

Still ahead on Tuesday’s agenda, the American Petroleum Institute will release its weekly report on U.S. crude stockpiles last week.

The U.S. Energy Information Administration will release its official government data on Wednesday amid expectations for a draw of 3.6 million barrels.

In other energy trading, gasoline futures gained 0.8% to $1.9150 a gallon by 9:08 AM ET (13:08 GMT), while heating oil rose 0.1% to $1.8968 a gallon.

Lastly, natural gas futures loss 1.0% to $2.380 per million British thermal unit.

-- Reuters contributed to this report.

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