KEY POINTS
- Brent rose 0.2 percent to $89.08 and WTI 0.2 percent to $83.40, extending multi-day gains.
- Attacks on two ships in the Strait of Hormuz and Bab el-Mandeb renewed Middle East supply fears.
- A 9.1-million-barrel US crude build and controlled Libyan tank fires capped the rally.
Oil prices rose in volatile trade on Wednesday after attacks on two ships renewed fears about Middle East supply disruptions, and as talks to end the Iran war stalled.
Brent crude climbed 17 cents, or 0.2 percent, to $89.08 a barrel by 1055 GMT, heading for a sixth straight day of gains. Meanwhile, US West Texas Intermediate rose 20 cents, also 0.2 percent, to $83.40, on course for a fifth daily gain.
Ship attacks and stalled talks lift prices
Both contracts earlier gained more than $1 before dipping as traders eyed US stockpile data that industry sources suggested might have swelled. However, prices resumed their climb after a senior Iranian source said Tehran and Washington were not discussing any ceasefire extension, since Iran considered the deal to have no start date and therefore nothing to extend.
Moreover, the United States and Yemen’s Iran-aligned Houthis reported separate attacks on shipping in the Strait of Hormuz and the Bab el-Mandeb Strait on Tuesday, two vital export routes alongside the Suez Canal. Consequently, traffic through Hormuz fell to a one-week low of eight vessels, well below the 125 to 140 that passed daily before the war.
Stockpile build tempers the rally
Still, rising US inventories capped the gains. American Petroleum Institute data cited by market sources showed crude stocks jumped about 9.1 million barrels, while gasoline fell 1.5 million barrels and distillate dropped 596,000. Because the build far exceeded expectations, Haitong Futures said an official confirmation from the Energy Information Administration later on Wednesday could ease worries about tight supply.
Furthermore, Libya’s National Oil Corporation said it had brought all fires at the Zawiya oil complex under control, which also eased upward pressure. Nevertheless, the EIA still expects Middle East supply disruptions to persist through the end of 2027. For the full year, it sees 2026 Brent averaging $86.81 a barrel and WTI averaging $80.88.
