Oil prices rise amid falling U.S. crude inventories, Middle East tensions
(MENAFN) On Wednesday, oil prices rebounded from multi-month lows as data revealed a decline in U.S. crude inventories, despite lingering concerns about weak demand. brent crude futures climbed USD1.85, or 2.42 percent, closing at USD78.33 a barrel, while U.S. crude futures rose USD2.03, or 2.77 percent, settling at USD75.23 a barrel. This recovery followed government data indicating that U.S. crude inventories fell for the sixth consecutive week, dropping by 3.7 million barrels to 429.3 million barrels, far exceeding analysts' expectations of a 700,000-barrel decline.
Earlier in the week, Brent crude futures had plummeted to their lowest levels since early January, and West Texas Intermediate crude futures reached their lowest levels since February. This decline was driven by fears of a potential recession in the United States, exacerbated by weak jobs data, which also led to a downturn in global stock markets. However, oil prices managed to break a three-session losing streak on Tuesday, setting the stage for Wednesday's recovery.
Adding to the volatility in oil prices, ongoing tensions in the Middle East continued to raise supply concerns. During Wednesday's trading session, U.S. Secretary of State Antony Blinken stated that American officials were in communication with allies and partners in the region, emphasizing a "unanimous agreement" that no party should take actions that would escalate the situation. This geopolitical backdrop, combined with the unexpected drop in U.S. crude inventories, provided support for the rebound in oil prices, reflecting the complex interplay of supply, demand, and geopolitical factors influencing the market.
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