Crude oil futures Wednesday rebounded from two-month lows as tensions in the Middle East ratcheted up, while lower US crude inventories also helped to lift markets.
A news report from Quantum Commodity Intelligence, an online industry-focused platform, indicated that Oct24 ICE Brent futures were trading at $80.79/b (1710 GMT), compared to Tuesday’s settle of $78.07/b, while Sep24 ICE Brent futures last traded at $80.76/b heading into the expiry.
At the same time Sep24 NYMEX WTI was trading at $77.81/b, versus today’s settle of $74.73/b.
The threat of escalation in the region was seen ramping up after Hamas leader, Ismail Haniyeh, was killed in Iran while attending the inauguration of the country’s new president.
Hamas blamed an Israeli airstrike for the death of the head of the Palestinian militant group’s political bureau, reported the Associated Press, but so far, Israel has not commented.
The high-profile attack on Iranian territory was seen as potentially escalating hostilities between Tehran and Jerusalem, which analysts have previously said could have a knock-on effect on oil markets in the form of supply disruptions.
Tensions were already rising after Israel launched strikes on Beirut in retaliation for last weekend’s Hezbollah attack against Israel over the weekend.
On Crude Inventories, the news platform reported that Benchmarks were given a lift as the latest Energy Information Administration (EIA) data revealed a 3.4 million drawdown in crude inventories, while another steep drop in gasoline stocks of 3.66 million barrels last week also lifted the oil complex with NYMEX RBOB up around 3%.
The online platform further clarified: “Markets had found earlier support from the latest American Petroleum Institute report showing crude stockpiles falling another 4.5 million barrels last week.
“At the same time, gasoline and distillates dropped after ongoing refinery disruptions resulting from Hurricane Beryl earlier in the month.
“Meanwhile, production at the five locally produced grades that underpin the North Sea Dated Brent physical benchmark will average around 540,000 bpd in September, according to loading programmes. This is steady on the month as producers round off summer maintenance schedules”, it added.
