Oil prices edged up about 1% on Wednesday on renewed concerns about additional energy supply disruptions in the Middle East due to continued fighting in Yemen, an attack on a refinery in Saudi Arabia and worries the US could strike Iran after next week’s US midterm elections.
Brent futures rose $1.55, or 1.4%, to $115.43 per barrel at 1:46 p.m. EDT (1746 GMT), while US West Texas Intermediate crude rose $2.92, or 2.9%, to $102.82.
That price gain pushed Brent back into overbought territory for the fourth time in five days.
Yemen’s Houthis attacked Aden airport on Wednesday, Yemeni government forces said, after the Iran-aligned group warned people to evacuate the facility as fighting escalated in the impoverished country caught in the wider Middle East conflict.
On Tuesday, the Houthis said they had hit Saudi Arabia’s
biggest oil refinery with a missile, intensifying their strikes
against the world’s second-largest crude producer behind the US.
Saudi authorities did not immediately confirm the strike on the
550,000-barrel-per-day facility.
“Crude futures once again pricing in nearer term tighter
supplies on news the US is likely to re-start military
operations soon, which could be more intense than in the past
given the latest attacks on Saudi Arabia and other Middle East
allies,” Dennis Kissler, senior vice president of trading at US
financial services firm BOK Financial, said in a note.
In recent weeks, several analysts have said renewed US
strikes on Iran could happen sometime after the US midterm
elections on November 3.
In hopes of ending the now eight-month-long conflict, Qatari
mediators have presented Iran with a new draft deal to end the
war with the US and Israel, an official briefed on the
negotiations said. A senior Iranian official, however, said Doha
had only put forward unacceptable ideas that did not amount to
an offer.
Iran’s foreign minister said on Wednesday that
Tehran continued to give diplomacy a chance to succeed and
raised the possibility of the seven-day plan proposed by Tehran
being completed in less than a week if implemented.
Qatar, along with Pakistan, has led mediation to end the
war, which has disrupted global shipping and oil supplies and
has spread to Saudi Arabia and Yemen.
US OIL STOCKPILES
Another factor supporting crude prices was a US federal
report showing a surprise decline in stockpiles.
The US Energy Information Administration said on Wednesday
that energy firms pulled 1.9 million barrels of crude from
storage during the week ended October 23.
That was a surprise draw compared with the 15,000-barrel
build analysts forecast in a Reuters poll, and was in line with
the 2-million-barrel decline seen in data from the American
Petroleum Institute on Tuesday, according to sources.
China, meanwhile, issued a fourth batch of fuel export
quotas for gasoline, diesel and jet fuel, a rare additional
issue that brings the 2026 total in line with 2025 despite curbs
earlier in the year, three people familiar with the matter said
on Wednesday.
Looking ahead, the market is waiting for an industry meeting
on Sunday, where OPEC+ oil producers are expected to keep their
December oil output targets steady, people familiar with the
matter say.
Production in most of the seven core OPEC+ members — Saudi
Arabia, Russia, Iraq, Kuwait, Algeria, Kazakhstan and Oman — is
below their output targets. OPEC+ includes the Organization of
the Petroleum Exporting Countries and allies like Russia.
Crude oil exports from Russia’s Baltic and Black Sea ports
could fall next month as domestic refiners increase diesel
output following a deal with Washington this month, traders
said.
Source: Khaleej Times