Oil up on tension in Middle East

Oil prices rose on Tuesday in Asia as traders continued to monitor the developments in Iran.

Crude Oil WTI Futures inched up 0.1% to $56.25 by 12:57 AM ET (04:57 GMT), while the international Brent Oil Futures gained 0.1% to $63.34.

The oil market is expected to be more volatile this week on uncertainty about what action the UK will take after Iran seized a British-flagged tanker late last week.

Meanwhile, the US is reportedly trying to limit fallout with Iran, as Secretary of State Mike Pompeo indicated the administration wouldn’t use the seizure of the British-flagged Stena Impero tanker as a reason to escalate its standoff with Iran.

“The responsibility … falls to the United Kingdom to take care of their ships,” Pompeo told Fox News.

UK Prime Minister Theresa May’s official spokesman described the seizure of the ship as “unacceptable and highly escalatory.”

May held an emergency meeting on Monday to discuss the situation with British ministers, but it wasn’t immediately clear what had been agreed.

In other news, the International Energy Agency (IEA) said it was closely monitoring developments in the Strait of Hormuz.

“The IEA is ready to act quickly and decisively in the event of a disruption to ensure that global markets remain adequately supplied,” it said in a statement.

“Consumers can be reassured that the oil market is currently well supplied, with oil production exceeding demand in the first half of 2019, pushing up global stocks by 900,000 barrels per day,” the IEA said in a statement.

On the data front, the American Petroleum Institute (API) will release its measure of US crude stockpiles on Thursday.

The API saw a weekly drop of about 1.4 million barrels last week, compared to the Energy Information Administration’s measure of a drawdown of 3.1 million barrels last week.