Reuters – Oil prices rose by more than a dollar on Wednesday amid concerns over Middle East supplies amid regional escalation, but declining U.S. crude and petroleum product inventories helped support the market.
Brent Crude Futures Jump 1.5% to $110.38 a Barrel
Brent crude futures rose $1.59, or 1.5 percent, to $110.38 by 0350 GMT.
U.S. Crude Climbs 1.4% to $99.18 a Barrel
U.S. West Texas Intermediate rose $1.36, or 1.4 percent, to $99.18 a barrel.
Prices had fallen in the previous trading session after the Iranian President discussed mediation efforts in a meeting with the Pakistani Army Chief in Tehran, but Brent crude hit a five-month high before pulling back.
“Oil prices have seen some rather sharp volatility over the last couple of sessions,” said Suvro Sarkar, head of energy research at DBS.
U.S. Crude Inventories Continue to Fall
“We believe this is a mix of profit-taking and optimistic expectations of reaching an agreement mediated by Qatar or Pakistan, versus the realization that any agreement remains far off, compounded by inventory data from the American Petroleum Institute, which show continued declines in U.S. inventories for both crude oil and petroleum products,” he added.
Iran's Nour News Agency reported that Tehran told Pakistani Army Chief Asim Munir on Tuesday that there would be no talks with Washington until its demands are met. It added that a Qatari delegation had arrived in Tehran. No official confirmation of these reports has been issued.
Ship-tracking firm Kpler reported in a note on Monday that at / least 18 attacks on vessels were reported over two weeks.
Attacks on Oil Tankers Spread Beyond the Strait of Hormuz
“Attacks on oil tankers have spread beyond the Strait of Hormuz… Iran is targeting vessels to the south as far as the Gulf of Oman, threatening loading operations outside the Arabian Gulf, as well as ship-to-ship transfers that have helped support Middle Eastern loadings as the conflict continues,” LSEG analysts said in a note.
The Houthis announced on Monday that they launched attacks on Saudi Arabia targeting a Aramco facility in Yanbu, the Shaybah oil field, King Khalid International Airport in Riyadh, and Abha Airport.
The death toll from a Houthi attack on a Yemeni government training camp on Monday rose to 73 as fighting between the two sides intensifies.
Iranian Foreign Minister Abbas Araghchi said in a televised interview broadcast on Tuesday that Tehran had not received a response from Saudi Arabia or the Houthis in Yemen to its offer to help mediate talks to stop the fighting between them.
In the United States, two Energy Department officials said on Tuesday that work is underway with refiners around the world to increase fuel production after diesel shortages drove prices up.
Market sources, citing American Petroleum Institute data, stated that crude oil inventories fell by 4.9 million barrels in the week ending October 16.
