Key facts
- Oil prices surged due to renewed Middle East hostilities and a significant draw in U.S. crude inventories.
- Brent crude climbed to $87.95 per barrel, and West Texas Intermediate traded at $82.89.
- U.S. crude inventories fell by approximately 3.3 million barrels last week, according to API data.
- The Strategic Petroleum Reserve released 3.7 million barrels, reaching a multi-decade low.
- Gasoline and distillate inventories saw increases.
- Hopes for a diplomatic breakthrough between the U.S. and Iran were hindered by recent missile launches and strikes.
Oil prices surged in early Asian trade on Wednesday, recovering from previous declines due to renewed Middle East hostilities and a significant draw in U.S. crude inventories. Brent crude climbed to $87.95 per barrel, up 4.59%, while West Texas Intermediate (WTI) traded at $82.89, up 4.58%.
U.S. Central Command (CENTCOM) reported that Iranian forces launched multiple ballistic missiles at U.S. bases across the Middle East, which were intercepted. Subsequently, U.S. and Saudi forces conducted precision strikes against terrorist logistics and weapons sites in eastern Iraq. This renewed fighting ended a brief pause in hostilities.
Adding to the upward price pressure, the American Petroleum Institute (API) reported that U.S. crude stockpiles fell by approximately 3.3 million barrels last week. The Strategic Petroleum Reserve (SPR) also released 3.7 million barrels, reaching its lowest level since March 1983. Gasoline inventories rose by 918,000 barrels, and distillate stocks increased by 355,000 barrels.
Previously, oil prices had been falling amid hopes of a diplomatic breakthrough between the U.S. and Iran. Market participants will closely monitor any further military escalation and the official EIA inventory report.