Oil prices climbed about 1 per cent on Wednesday, moving away from a seven-week low touched in the previous session, after the U.S. military launched new strikes against Iran and as market data showed another large draw in U.S. crude stocks.
The U.S. military’s strikes on Iranian targets followed after President Donald Trump vowed on Tuesday to respond to the downing of a U.S.
Apache attack helicopter overnight, in a fresh escalation that threatens to unravel a fragile ceasefire between Washington and Tehran.
Brent futures rose 83 cents, or 0.9 per cent to $92.29 a barrel, while U.S. West Texas Intermediate (WTI) crude climbed 68 cents, or 0.8 per cent, to $88.97.
Brent had settled at its lowest on Tuesday since April 17, while WTI had closed down at its weakest since May 29 after Israel and Iran halted direct attacks on each other after Trump urged them to stop.
Tehran said it would resume hostilities if Israel continued to attack the Hezbollah militia in Lebanon. Israel’s refusal to end its campaign against Iran-backed Hezbollah has hindered Trump’s efforts to extend a tenuous ceasefire in the wider U.S.-Israeli war with Iran into a durable settlement.
At the same time, Tehran has continued to block most shipping through the Strait of Hormuz, which normally carries a fifth of the world’s crude oil and liquefied natural gas. Washington has imposed its own blockade of Iranian ports.
U.S. Energy Secretary Chris Wright said on Tuesday that ship traffic in the Gulf and oil exports through the Strait of Hormuz are rising even as Washington and Tehran struggle to reach a deal on ending their more than three-month-old war.
On the supply side, U.S. crude oil inventories fell last week for an eighth consecutive week, according to market sources citing data from the American Petroleum Institute released on Tuesday, while gasoline stocks also declined.
Crude stocks fell by 9.12 million barrels in the week ended June 5, the sources said on condition of anonymity, while gasoline inventories fell by 1.19 million barrels.
The United States has acted as a marginal supplier of crude and products during the war and ramped up exports to Asia and Europe. Lower U.S. inventories could hurt exports and push up prices.
Source: Reuters
– Agencies
