Ammon News - Oil prices were hovering near seven-month highs on Wednesday as the threat of military conflict between the U.S. and Iran that could disrupt supply continued to worry investors as talks between the parties are set for Thursday.

Brent futures were up 43 cents, or 0.6%, at $71.20 per barrel at 0400 GMT. WTI futures rose 38 cents, or 0.6%, to $66.01.

Brent prices reached their highest since July 31 on Friday, while WTI hit its highest since August 4 on Monday, and both contracts have held near there as the U.S. has positioned military forces in the Middle East to compel Iran to negotiate an end to its nuclear and ballistic missile programme.

According to market sources, the American Petroleum Institute late on Tuesday reported a massive increase in U.S. oil stockpiles of 11.43 million barrels in the week ended February 20.

However, gasoline and distillate inventories fell, the sources said, citing the API data.

Official U.S. oil inventory reports from the Energy Information Administration are due later on Wednesday.

Reuters