Oil prices moved higher for a third consecutive session on Wednesday, although they reduced earlier gains as investors monitored renewed military exchanges between the United States and Iran and their potential implications for Middle Eastern crude supplies.
As of 04:46 ET (08:46 GMT), November Brent crude futures were up 0.2% at $94.87 a barrel, while West Texas Intermediate crude futures gained 0.1% to $90.31 a barrel, according to Investing.com data.
Brent had earlier reached $97.04 a barrel. Both benchmarks gained nearly 5% in the previous session and reached their highest levels in approximately five weeks.
Strait of Hormuz Remains in Focus
The United States carried out another series of airstrikes against Iranian targets overnight, followed by retaliatory missile and drone attacks by Iran against U.S. forces in Jordan and Bahrain.
The developments have increased market attention on tanker movements through the Strait of Hormuz and the potential for further disruption to regional crude supplies.
Two supertankers carrying Saudi crude were struck by unidentified projectiles while travelling through the strait on Monday. Each vessel had loaded approximately 2 million barrels at Saudi Arabia’s Juaymah terminal.
ING analysts said:
“We’ve seen oil flow through the Strait of Hormuz despite the stalemate between the US and Iran, but rising tensions clearly put crossings at risk,”
The U.S. energy secretary said 17 million barrels of oil passed through the Strait of Hormuz on Monday. Analysts said ship-tracking data indicated lower volumes and that longer-term averages could provide a more representative measure of flows.
Iranian Crude Loadings Decline
Reuters reported that Iranian crude loadings declined to between 220,000 and 255,000 barrels per day in August, compared with approximately 2 million barrels per day in March.
Markets are also assessing disruptions affecting Middle Eastern and Russian diesel exports.
ING analysts said:
“Given disruptions to Middle East and Russian diesel exports, and with little sign of an imminent recovery, middle distillate cracks are likely to remain highly elevated and volatile, particularly as we move towards seasonally stronger demand,”
The statement represents ING’s assessment of the outlook rather than an established future outcome.
U.S. Crude Inventories Fall by 2.6 Million Barrels
U.S. crude inventories declined by 2.6 million barrels during the week ended 28 August, according to American Petroleum Institute data released on Tuesday.
The decline followed a 4.2 million-barrel increase in the previous week.
Gasoline inventories increased by approximately 300,000 barrels, while distillate inventories declined by around 300,000 barrels, according to the API figures.
Investors are awaiting the U.S. Energy Information Administration’s weekly inventory report, due later on Wednesday, for further data on crude and refined product stocks.