Oil prices experienced a significant surge on Wednesday due to escalating tensions in the Middle East, raising concerns regarding potential disruptions in oil supply from the region.
Read more: Oil prices soar by 3 percent amid declining U.S. crude stocks
Brent crude futures saw a notable increase of $1.75, equivalent to 2 percent, reaching $91.65 per barrel. Similarly, West Texas Intermediate crude (WTI) futures rose by $1.91, or 2.2 percent, reaching $88.57 per barrel.
During earlier trading, both benchmarks recorded gains of over $2, reaching their highest levels in a span of two weeks.
According to market sources referencing figures from the American Petroleum Institute, U.S. crude stocks experienced a significant decline of approximately 4.4 million barrels in the week ending October 13. This drawdown was considerably larger than the 300,000 barrel decrease that analysts had anticipated.
Scheduled for later on Wednesday, official U.S. government data is set to be released.
On the demand side
Official data released on Wednesday indicated that China’s economy grew at a faster pace than anticipated in the third quarter. This suggests that the recent implementation of various policy measures is contributing to strengthening the ongoing tentative recovery.
According to China’s official data, the country achieved a record daily rate of oil refinery throughput in September. The throughput increased by 12 percent compared to the previous year, with refiners ramping up their operations to meet the robust demand for transport fuel during the Golden Week holiday and the improving manufacturing sector.
However, analysts expressed caution regarding China’s economic growth due to concerns over the impact of the real estate sector, which continues to weigh on the overall performance.
In the meantime, September witnessed a higher-than-anticipated increase in U.S. retail sales, leading to expectations of an additional interest rate hike by the Federal Reserve before the year concludes. The potential interest rate hikes, aimed at curbing inflation, have the potential to dampen economic growth and subsequently reduce the demand for oil.
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