Oil prices advanced for a third consecutive session on Wednesday, although earlier gains moderated as markets assessed renewed military exchanges between the United States and Iran and the potential impact on crude supplies from the Middle East.
At 04:46 ET (08:46 GMT), November Brent crude futures were 0.2% higher at $94.87 a barrel, while West Texas Intermediate (WTI) crude futures increased 0.1% to $90.31 a barrel, according to Investing.com data.
Brent had traded as high as $97.04 earlier in the session. Both crude benchmarks gained almost 5% on Tuesday, reaching their highest levels in around five weeks.
Tanker Traffic Through Strait of Hormuz Draws Attention
The United States launched another series of airstrikes against Iranian targets overnight. Iran subsequently carried out retaliatory missile and drone attacks against U.S. forces in Jordan and Bahrain.
Markets are monitoring whether the developments could further affect tanker traffic through the Strait of Hormuz and regional crude shipments.
Two supertankers carrying Saudi crude were struck by unidentified projectiles while travelling through the strait on Monday. Each vessel had loaded around 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 moved through the Strait of Hormuz on Monday. Analysts, however, said ship-tracking data indicated lower volumes and suggested that longer-term averages offered a more representative measure of traffic through the waterway.
Iranian Oil Loadings Fall From March Levels
Iranian crude loadings declined to between 220,000 and 255,000 barrels per day in August from approximately 2 million barrels per day in March, Reuters reported.
Disruptions to diesel exports from the Middle East and Russia are another factor being monitored by energy markets.
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 comments reflect ING’s assessment of future market conditions rather than an established outcome.
API Reports 2.6 Million-Barrel Drop in U.S. Crude Stocks
U.S. crude oil inventories decreased by 2.6 million barrels in the week ended 28 August, according to American Petroleum Institute figures released late Tuesday.
That compared with an increase of 4.2 million barrels during the preceding week.
API data also showed gasoline inventories increasing by approximately 300,000 barrels, while distillate stocks declined by a similar amount.
The figures came ahead of the U.S. Energy Information Administration’s weekly inventory report, scheduled for release later Wednesday, which will provide further information on U.S. crude and refined product inventories.
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