Feb. 2 (UPI) -- Geopolitical tensions in the Persian Gulf offered support to crude oil prices early Thursday, though renewed work in Libya could undermine the rally.
The White House unnerved markets further in a spate of diplomatic outbursts. The Washington Post reported President Donald Trump ended a call early with Australia's prime minister amid disputes over tightened U.S. immigration policy. Trump's stance has already angered many conventional European allies and the administration added to increased tensions by putting Iran "on notice" for its recent missile tests.
Saber-rattling against Iran is a particular market concern because as much as 20 percent of the world's oil moves through the narrow Strait of Hormuz in the Persian Gulf.
The price for Brent crude oil was up about 0.3 percent about a half hour before the start of U.S. trading to $56.99 per barrel. The U.S. benchmark for crude oil prices, West Texas Intermediate, was up 0.2 percent to $53.98 per barrel.
Today's rally could be short-lived as competing market factors play against geopolitical tensions that may not evolve beyond rhetoric. Already, a market report from S&P Global Platts found crude oil prices may be fast approaching a ceiling as the rise in U.S. crude oil production balances against an agreement from members of the Organization of Petroleum Exporting Countries to trim output.
Iran is the only member of OPEC allowed to produce more oil. Libya, meanwhile, is exempt from the deal and Austrian energy company OMV said the improved political and security situation there meant it was able to start production at two of the country's larger oil fields.
"OMV has been a trustful partner to Libya's National Oil Corp. throughout challenging times and remains fully committed to invest in Libya in the future," OMV Chairman and CEO Rainer Seele said in a statement.
Elsewhere, U.S. payroll numbers could drag on broader market momentum even after private payroll processor ADP reported strong gains earlier this week.
For the week ending Jan. 28, the U.S. Labor Department reported first-time claims for unemployment fell from the previous week's revised level. The less-volatile four-week average, however, was revised up by 2,250 and the previous week's long-range average increased by 250.