Oil prices extended gains on Wednesday as investors worried about supply disruptions from a worsening geopolitical landscape, although a surprise jump in US crude oil inventories eased some of those concerns.
Brent crude futures rose 84 cents, or 0.9 per cent, to $89.76 a barrel by 1538GMT. US West Texas Intermediate futures rose 76 cents, or 0.9 per cent, to $85.91 a barrel.
Both contracts were up more than a dollar during the session, before the US Energy Information Administration reported a 3.2 million barrel increase in crude stocks. Analysts polled by Reuters had expected an over 1.5 million barrel decrease which was in line with preliminary data reported by the American Petroleum Institute on Tuesday.
“We needed a little bit of a pullback to reload before gunning higher again. Other than being overbought, market fundamentals continue to point upwards,” said Bob Yawger, director of energy futures at Mizuho.
Brent and WTI futures have traded at over five month highs for three consecutive sessions, rallying on concerns that Ukraine’s recent attacks on Russian refineries and potential widening of the conflict in West Asia could impact oil supplies.
Iran has vowed revenge against Israel for an attack on Monday that killed high-ranking military personnel. Iran, which provides support for the Hamas militia fighting Israel in Gaza, is the third-largest producer in the Opec.
Bank of America Global Research raised its 2024 Brent and WTI forecasts to $86 and $81 a barrel respectively, it said in a note on Wednesday, on firming demand and escalating political tensions.
Meanwhile, a meeting of the top OPEC+ ministers on Wednesday kept oil output policy unchanged and pressed some countries to boost compliance with output cuts.
India stocks
The Indian government has sought private investment in a proposed crude storage facility at Padur, Karnataka, reports Our Delhi Bureau.
The Indian Strategic Petroleum Reserves Ltd (ISPRL) is inviting bids for the construction of a 2.5 million-tonne underground facility.
This marks a significant shift from the government-funded model used for the existing strategic reserves located in Visakhapatnam, Mangalore, and Padur.
