NEW YORK: 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 US$1.44, or 1%, to settle at US$115.32 per barrel, while US West Texas Intermediate crude rose US$2.88, or 3%, to settle at US$102.78.
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.
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 said.
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. — Reuters
