Even though a U.S. government report revealed crude inventories in the U.S. increased by 9.4 million barrels, political tensions outweighed the good news in relationship to oil, as prices surged by almost 5 percent on Thursday.
While most of the political concerns center on the growing differences with Russia and the West, other factors like the ongoing battle with Iran over its nuclear program, as well as the neverending attacks on oil production in Nigeria have traders on edge on supply disruptions. In the case of Russia, their foray into Georgia already has slowed down the transportation of Azeri oil in the region.
One other factor contributing to the rise in oil prices is the possibility that Tropical Storm Fay could come back into the Gulf of Mexico during the weekend, which would slow down production by affecting offshore platforms and oil refineries.
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