Oil rises after three weeks of decline

Oil rose on Wednesday after the biggest drop in three weeks as investors weighed risks from U.S. retaliation to signs of strong U.S. supplies, including a deadly attack in Jordan. U.S. crude rose above $76 a barrel after losing 2.5 percent the previous session, its biggest drop since early January. Brent crude traded around $81. Data showing rising U.S. crude inventories and rising oil production weighed down prices on Wednesday. President Joe Biden said earlier this week that he had decided how to respond to the weekend attack that killed American soldiers, without giving details. He said Iran was responsible for providing the weapons used in the attack, but Tehran has denied involvement and vowed to retaliate for any attacks on its territory or assets abroad. Oil capped its first monthly gain in four months in January after Yemen-based Houthi rebels escalated attacks on commercial ships in the Red Sea. But concerns about demand at key consumers and strong supply from non-OPEC producers have limited price gains. “The market will continue to monitor the Red Sea and the region in general, but we know that crude will not be affected by supply cuts unless there is a good reason to do so,” said Vandana Hari, founder of Vanda Insights in Singapore. “The weekly U.S. crude inventory increase and oil production figure have taken pressure off prices.” U.S. oil production rose to 13.3 million bpd in November, beating a record set in September, according to the Energy Information Administration. The data also showed weekly production returned to 13 million bpd, while crude inventories rose for the first time in three weeks.