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Oil prices edged higher on Thursday to their highest in more than two months, after US President Donald Trump said US personnel were being moved out of the Middle East, which raised fear that escalating tensions with Iran could disrupt supply.
Brent crude futures rose 15 cents, 0.2 per cent, to $69.92 a barrel at 1230 am GMT, while US West Texas Intermediate crude 22 cents, 0.3 per cent, to $68.37.
Both Brent and WTI surged more than 4.0 per cent to their highest since early April on Wednesday, as per a Reuters report.
Trump on Wednesday said US personnel were being moved out of the Middle East because "it could be a dangerous place," adding that the United States would not allow Iran to have a nuclear weapon.
Reuters reported earlier on Wednesday that the US is preparing a partial evacuation of its Iraqi embassy and will allow military dependents to leave locations around the Middle East due to heightened security risks in the region, according to US and Iraqi sources.
Iraq is OPEC's No. 2 crude producer after Saudi Arabia.
A US official said military dependents could also leave Bahrain.
Meanwhile, Iran's Minister of Defense Aziz Nasirzadeh said Tehran will strike US bases in the region if nuclear talks fail and conflict arises with Washington. Trump has repeatedly threatened Iran with bombing if it does not reach a new nuclear deal.
Optimism around a trade deal between the US and China, which could boost energy demand in the world's two biggest economies, also buoyed oil prices.
In the US, crude inventories fell by 3.6 million barrels to 432.4 million barrels last week, the Energy Information Administration said. Analysts polled by Reuters had expected a draw of 2.0 million barrels.