Oil prices rose on Thursday as concerns over supplies from the Middle East persisted amid increasing attacks on shipping traffic in the Gulf and the Strait of Hormuz.
Brent crude futures rose $1.33, or 1.33%, to $101.53 a barrel by 01:16 GMT. U.S. West Texas Intermediate (WTI) crude futures gained $1.11, or 1.26%, to $89.39 a barrel.
Prices settled lower on Wednesday after the International Energy Agency agreed to accelerate withdrawals from oil reserves and prioritize diesel supplies under a plan launched in March, as governments seek to address record fuel prices and supply disruptions caused by the war in Iran.
Threats targeting oil shipments in the Gulf and the Strait of Hormuz have increased during October as the U.S.-Israeli conflict with Iran enters its eighth month. Before the war, shipments equivalent to around 20% of global oil and fuel supplies passed through the strait.
Attacks on oil tankers transiting the Strait of Hormuz reached their highest weekly level since the start of the war in Iran last week. The increase in attacks comes as more crude is flowing from the Gulf, although shipments are being carried at higher costs and with greater risks to vessels and crews.
In the latest attack, the United Kingdom Maritime Trade Operations agency reported Wednesday that a tanker north of Qatar was struck by several projectiles, causing injuries.
Daniel Hynes, senior commodities analyst at ANZ, said in a note on Thursday that such attacks had previously led to a decline in shipments from the Gulf. However, producers now appear willing to accept the risk of their vessels being damaged because there is no alternative way to transport their oil to international markets.
Hynes added that the IEA’s reserve withdrawals would likely consist of barrels that were already part of the agency’s original 400 million-barrel release plan when the Middle East conflict began, meaning the move does not appear to represent an additional draw from strategic reserves.
“Ultimately, strategic reserve releases can temporarily increase supply flows, but they do not create new production capacity,” Hynes said.
U.S. inventory data, from the world’s largest oil consumer and producer, also supported prices. Crude oil inventories fell by more than expected, while diesel inventories declined slightly.
The U.S. Energy Information Administration said Wednesday that crude inventories fell by 3.2 million barrels to 424.1 million barrels in the week ended October 2, compared with analysts’ expectations for a decline of 1.7 million barrels in a Reuters poll.
Distillate inventories, which include diesel and jet fuel, fell by 42,000 barrels to 105.14 million barrels, remaining well below levels recorded at this time of year over the past five years.
Source: Reuters
