08:33 AM EDT, 07/18/2025 (MT Newswires) -- Oil traded higher early on Friday on strong summer demand and continuing violence in the Middle East.

West Texas Intermediate crude oil for August delivery was last seen up US$1.24 to US$68.78 per barrel, while September Brent crude was up US$1.13 to US$70.65.

The rise comes on tightening supply as drone attacks on oil infrastructure in Iraq's Kurdistan region cut into production from the region. The attacks are being blamed on Iran-backed militias, though no group has claimed responsibility.

"Four days of drone attacks on oil fields in the Kurdish part of Iraq are bound to take their toll as the region's output has been slashed from 280,000 bpd to around 130,000 bpd," PVM Oil Associates noted.

The cut to supply comes amid strong summer demand, with the Energy Information Administration on Wednesday reporting U.S. commercial oil inventories fell a more than expected 3.9-million barrels last week. However the inventory drop comes even as OPEC+ returns 2.2-million barrels per day of production cuts to market in monthly tranches that are expected to be complete in September.

"While the marginal barrel has remained bid into July, the hurdle to place incremental supply is only growing from here. Supply from the US, Europe, and Latin America is left with a smaller share as Middle Eastern supplies come to market, especially once domestic crude burn in the summer eases, pushing more barrels to the seaborne market," Brian Leisen, Global Oil Strategist at RBC Capital Markets said in a note.