Brent climbs above $115 a barrel as Middle East tensions, falling US crude inventories and OPEC+ production outlook influence markets
Oil prices rose more than 1% on Wednesday after a reported attack on Saudi Arabia’s largest oil refinery renewed concerns over potential supply disruptions amid ongoing tensions in the Middle East.
Brent crude futures gained $1.36, or 1.2%, to $115.24 per barrel as of 0858 GMT, while US West Texas Intermediate (WTI) crude rose $1.62, or 1.6%, to $101.52 per barrel.
Yemen’s Iran-aligned Houthi group claimed on Tuesday that it had struck Saudi Arabia’s largest oil refinery with a missile, escalating its attacks against the world’s second-largest crude producer.
Saudi authorities had not immediately confirmed the reported strike on the refinery, which has a processing capacity of 550,000 barrels per day.
The development heightened concerns about potential disruptions to oil supplies, with markets assessing the possibility of further escalation in the region.
ING commodity strategists said the market was pricing in a greater likelihood of renewed escalation, while uncertainty surrounding US President Donald Trump’s next move towards Iran continued to support elevated oil prices.
The strategists indicated that the geopolitical risk premium could begin to ease if the November 3 US midterm elections pass without renewed strikes on Iran.
Meanwhile, US crude oil inventories declined by 2.03 million barrels in the week ended October 23, according to market sources citing figures from the American Petroleum Institute (API).
The decline contrasted with expectations of a 15,000-barrel increase in a Reuters poll of analysts, providing additional support to crude prices.
Official inventory figures from the US Energy Information Administration (EIA) are scheduled for release later on Wednesday.
Investors are also awaiting Sunday’s meeting of the OPEC+ group, where major oil producers are expected to maintain their December production targets, according to people familiar with the matter.
Production in most of the group’s seven core members, including Saudi Arabia, Russia, Iraq, Kuwait, Algeria, Kazakhstan and Oman, remains below their respective output targets.
Separately, Russian crude oil exports through Baltic and Black Sea ports could decline in November as domestic refineries increase diesel production following an agreement with Washington earlier this month, according to traders.
