Oil rates rise over US strong demand, supply concerns


(MENAFN) Oil rates rose on Wednesday, reaching five-month highs amid strong demand projections in the US, the world's largest oil consumer, and mounting concerns over oil supply routes in the Middle East.

At 12 PM local time (0900 GMT), the international benchmark Brent crude traded at USD89.07 per barrel, marking a 0.17 percent increase from the previous session's closing price of USD88.92 per barrel. Meanwhile, the American benchmark West Texas Intermediate (WTI) traded at USD85.19 per barrel, up 0.05 percent from its previous session's close at USD85.15 per barrel.

Recent conflicts between Israel and Palestine, along with the ongoing Russia-Ukraine war, have pushed oil prices to their highest levels in five months. Additionally, the potential for a further decrease in Russian oil exports continues to bolster prices.

Tensions in the Middle East were further exacerbated by a missile strike on the Iranian Consulate in Damascus, resulting in the death of a senior commander of Iran's Islamic Revolutionary Guard Corps (IRGC) and six other officers. This has raised concerns given the strategic energy supply routes in the region.

The American Petroleum Institute (API) released data late Tuesday showing a 2.3 million-barrel decline in US crude oil inventories, exceeding market expectations of a 2 million-barrel draw. This data, indicating robust demand, contributed to the upward movement of prices.

However, geopolitical instability and the decrease in US crude inventories prompted profit-taking among investors, which tempered the upward momentum ahead of the OPEC+ group meeting scheduled for later in the day. Analysts anticipate that the group will maintain its current production policy.

Official statistics from the Energy Information Administration (EIA) are expected later in the day. Any prediction of a buildup in crude and gasoline stockpiles could exert downward pressure on prices.

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