Oil prices rose on Wednesday in volatile trading as investors awaited Washington's next move in the war with Iran, following projections that Democrats had secured a majority in the US Congress, taking control from President Donald Trump's Republican Party.
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Brent crude futures climbed 82 cents, or 0.8%, to $104.42 a barrel by 05:10 GMT. US West Texas Intermediate crude futures rose 50 cents, or 0.5%, to $96.59 a barrel.
In the previous session, Brent crude fell more than 1% to its lowest level in nearly four weeks, as traders closely monitored efforts to end the wars in Ukraine and Iran.
Votes were still being counted in the US midterm elections, with projections indicating that Democrats would hold majorities in both the Senate and House of Representatives for the remainder of Trump's second term.
"President Trump's mixed signals, with military strikes continuing alongside statements downplaying escalation, have made it difficult for traders to establish a firm market direction," said Priyanka Sachdeva, head of market insights at Phillip Nova.
She added that taking some profits and reducing speculative long positions was justified, particularly after the sharp rally in October.
However, Sachdeva noted that the risk of supply disruptions through the Strait of Hormuz had not disappeared. An unexpected decline in US crude inventories also provided some underlying support for prices.
A US official said on Tuesday that the United States had carried out "defensive" strikes on Iran's Qeshm Island, targeting surface-to-air missiles that had been used against US assets.
Another official said the strikes appeared limited and did not indicate a return to large-scale military operations.
Markets continue to closely monitor any progress in negotiations aimed at ending the US-Israeli war with Iran, as Qatar has intensified mediation efforts to prevent further attacks from escalating following the US elections.
A senior Iranian official told Reuters on Tuesday that Iran and the United States remained far from reaching an agreement to end the war.
Trump told the Financial Times on Tuesday that the United States had no immediate plans to strike Iran.
Meanwhile, US crude inventories fell by 5.27 million barrels in the week ending October 30, market sources said on Wednesday, citing data from the American Petroleum Institute (API).
A Reuters poll of eight analysts had forecast an increase of around 880,000 barrels in crude inventories.
The sources added that gasoline inventories rose by 1.43 million barrels, while distillate stocks fell by 1.19 million barrels compared with the previous week.
"Diesel inventories remain tight, while gasoline stocks increased more than expected. Overall, these figures support oil prices," Haitong Futures said in a Wednesday note.
Official data from the US Energy Information Administration (EIA) is due at 10:30 a.m. Eastern Time (15:30 GMT) on Wednesday.
Source: Reuters
