Oil prices climbed about 2% on Wednesday as fighting in Yemen and an attack on a Saudi Arabian refinery renewed fears of supply disruption. A surprise drop in US crude stockpiles added support, while Qatari mediation to end the war continues.
Oil climbed about 2% on Wednesday as continued fighting in Yemen and a strike on a refinery in Saudi Arabia raised concerns about more supply disruptions from the Middle East.
Brent and WTI gain as Houthi attacks escalate
Brent futures rose $1.81, or 1.6%, to $115.69 per barrel at 10:42 a.m. EDT. US West Texas Intermediate crude rose $2.52, or 2.5%, to $102.42. The gain pushed Brent back into overbought territory for the fourth time in five days.
Yemen's Houthis attacked Aden airport on Wednesday, government officials said. On Tuesday, the group said it had hit Saudi Arabia's biggest oil refinery with a missile. Saudi authorities did not immediately confirm the strike on the 550,000-barrel-per-day facility.
Dennis Kissler of BOK Financial said in a note: "Crude futures once again pricing in nearer term tighter supplies", citing the likely restart of US military operations. In recent weeks, several analysts have said renewed US strikes on Iran could happen sometime after the US midterm elections on November 3.
US stockpiles fall unexpectedly
Meanwhile, a US federal report supported prices. The US Energy Information Administration said energy firms pulled 1.9 million barrels of crude from storage during the week ended October 23. Analysts in a Reuters poll had forecast a 15,000-barrel build.
Peace talks and OPEC+ meeting in focus
Qatari mediators have presented Iran with a new draft deal to end the war with the US and Israel, according to an official briefed on the negotiations. A senior Iranian official, however, said Doha had only put forward unacceptable ideas that did not amount to an offer.
Next, the market is waiting for an industry meeting on Sunday, where OPEC+ producers are expected to keep their December oil output targets steady, according to people with knowledge of the matter.
Source: Reuters via Investing.com
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