Oil prices gained over $1 on Wednesday as escalating Middle East tensions fuelled fears of supply disruptions, while falling United States (US) crude and product inventories lent support to the market.
Brent crude futures rose $1.59, or 1.5%, to $110.38 per barrel, US West Texas Intermediate crude gained $1.36, or 1.4%, to $99.18 per barrel.
Prices fell in the previous trading session after Iran’s President discussed mediation efforts in a meeting with Pakistan’s Army Chief in Tehran, though Brent hit a five-month high before easing.
“Oil prices have been having a bit of wild ride in the last couple of sessions,” said Suvro Sarkar, head of energy research at Dublin Business School.
“We believe this is a mix of profit taking and optimistic hopes of a Qatar or Pakistan-brokered deal, countered by the realisation that any deal is still very distant and compounded further by inventory data from the American Petroleum Institute, which shows drawdowns continuing in the US for both crude and products.”
–Reuters–
