Doha: Oil prices rose more than $1 at settlement today as investors worried about potential supply disruptions after Poland shot down drones in its airspace and the United States sought to impose new sanctions on buyers of Russian oil. There was however a report showing increased US supplies, which capped gains. Brent crude futures rose $1.10, or 1.7 percent, to settle at $67.49 a barrel. US West Texas Intermediate (WTI) crude futures rose $1.04, or 1.7 percent, to $63.67. Traders expect the Federal Reserve to cut interest rates at its meeting next week, which should boost economic activity and demand for oil. However, supply forecasts remain negative. The US Energy Information Administration announced today that US crude oil, gasoline, and distillate inventories rose last week.

According to Qatar News Agency, the rise in oil prices was driven by fears of disruptions in supply chains due to escalating geopolitical tensions. The incident involving Poland shooting down drones in its airspace has heightened concerns about regional stability and potential impacts on energy markets. Additionally, the US’s intentions to impose new sanctions on buyers of Russian oil could further strain global oil supplies.

Despite these factors pushing prices upward, the impact was somewhat limited by reports of increased oil inventories in the US. The Energy Information Administration’s announcement revealed a rise in crude oil, gasoline, and distillate stocks, indicating a surplus in supply that has helped to keep price gains in check.

Market analysts are closely watching the upcoming Federal Reserve meeting, as a potential interest rate cut could stimulate economic activity, subsequently increasing demand for oil. However, the current supply forecasts, showing rising inventories, suggest that any significant upward movement in oil prices might be tempered in the short term.