(Bloomberg) -- Oil clinched its first monthly gain since September after attacks on vessels in and around the Red Sea diverted tanker traffic and escalated tensions in the Middle East.
US futures climbed nearly 6% in January, even as they ended the week lower. Traders are awaiting President Joe Biden's response to an attack by Iranian-backed militants that killed three US soldiers last week. But for now, the ongoing conflict hasn't affected crude supplies, which is capping the market's gains.
Oil traded in a narrow range for much of January, buoyed by war risk premium but limited by concerns about supply and demand. US production reached a new monthly record of 13.3 million barrels a day, according to data released Wednesday. And supply increases from the Americas this year should offset all of global demand growth, according to the International Energy Agency.
Meanwhile, US inventory data released Wednesday presented a mixed picture, with inventories at the key Cushing, Okla., storage hub falling to the lowest level since November while gasoline demand wavered.
READ: Refinery Outages Add to Crude Inventory Build: EIA Takeaways
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