Oil prices stabilized on Wednesday as investors closely monitored concerns surrounding crude and fuel supplies. These concerns were triggered by attacks on Russian refineries and the potential escalation of the Israel-Gaza conflict.
At 05:15 GMT, Brent crude futures for June increased by 4 cents to reach $88.98 per barrel, while U.S. West Texas Intermediate (WTI) crude futures for May slightly decreased by 4 cents to $85.11 per barrel. During the previous session, both Brent and WTI experienced a 1.7 percent climb, reaching their highest levels since October.
Read more: Oil prices surge on positive economic outlook, geopolitical concerns
The surge in prices was a result of a drone attack on another Russian refinery, which raised the risk of additional disruptions in the country’s processing capacity, leading to a reduction in gasoline and diesel fuel output. Russia is one of the world’s top three oil producers and a significant exporter of oil products.
Investors are also apprehensive about potential supply disruptions in the crucial Middle East producing region due to possible Iranian retaliation against Israel for an attack that claimed the lives of high-ranking military personnel. Iran, the third-largest producer in the Organization of the Petroleum Exporting Countries (OPEC).
Yeap Jun Rong, a market strategist at IG, commented that geopolitical tensions continue to generate uncertainty regarding potential supply disruptions. He noted that oil prices have been on an upward trend, reaching a five-month high and maintaining an upward bias.
Supply concerns
Additionally, there are supply concerns related to Mexico’s state energy company Pemex, as it requested its trading unit to cancel up to 436,000 barrels per day of crude exports this month in preparation for processing domestic oil at the newly established Dos Bocas refinery, Reuters reported.
Early indications suggest that oil stockpiles in the United States, the world’s largest oil consumer, are diminishing. Traders reported that data from the American Petroleum Institute indicated a 2.3 million barrel decrease in crude inventories last week, surpassing the 1.5 million barrel drop predicted by analysts in a Reuters poll. U.S. government inventory data is scheduled to be released at 1430 GMT on Wednesday.
According to five OPEC+ sources, a ministerial panel for OPEC and its allies, including Russia, is unlikely to recommend any changes to oil output policies at their meeting on Wednesday, as reported by Reuters.
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