Commodities
Brent climbs back above $110 as industry data point to a 4.9 million-barrel drop in US crude stocks
Crude recovered Tuesday's losses as attacks on Gulf shipping continued, with official US inventory figures due later on Wednesday.
HedgeWeekly News Desk ·
Brent crude rose $1.61, or 1.5%, to $110.40 a barrel by 06:30 GMT on Wednesday, while US benchmark WTI gained $1.45 to $99.27. The move reversed most of Tuesday's swing, when Brent touched $111.99, a five-month high, before settling 76 cents lower at $108.79 after unconfirmed reports that Qatar and Pakistan were working on a plan to revive US-Iran talks.
Industry figures from the American Petroleum Institute showed US crude inventories fell 4.9 million barrels in the week to October 16, according to Reuters reporting cited by FinanceFeeds, following an 11.12 million-barrel API draw the week before. A market survey cited by TradingKey had pointed to a decline of only about 300,000 barrels, with distillate stocks expected to fall about 1.3 million barrels.
Supply risks continued to build. Kpler counted at least 18 attacks on vessels over two weeks, and the Houthis claimed strikes on Saudi energy sites including Yanbu and the Shaybah oilfield. Two US Energy Department officials said they were working with refiners worldwide to lift fuel output because of a diesel shortage. DBS energy research head Suvro Sarkar attributed Tuesday's drop to profit-taking and said a negotiated settlement remained distant.
The next test is the Energy Information Administration's weekly report, due later on Wednesday: confirmation of a draw near the API figure would be far larger than the survey forecast and would tighten a US market already short of diesel. Brent is also trading above the EIA's own projection of about $105 a barrel as an average for the fourth quarter, leaving prices exposed to any concrete sign of progress on Iran diplomacy and to further attacks on Gulf shipping.