Crude rebounded on Wednesday as shrinking US inventories met escalating Middle East tensions. Brent futures rose 1.61 dollars, or 1.5 percent, to 110.40 dollars a barrel by 09:30 Saudi time, and WTI gained 1.45 dollars, or 1.5 percent, to 99.27 dollars, Reuters reported via Arab News. The bounce followed a choppy Tuesday in which Brent hit a five month high before easing on hopes of a Qatar or Pakistan brokered deal, hopes the same reporting calls distant: Iran told Pakistan’s army chief there would be no talks with Washington until its demands were met.
The American Petroleum Institute estimated US crude stocks fell by 4.93 million barrels in the week ending October 16, after an 11.12 million barrel draw the week before. Commercial inventories excluding the Strategic Petroleum Reserve have now lost more than 56 million barrels over the last 27 weeks, though the total is still only about 5 million barrels below where the year began, held up in part by continued SPR draws: 300,000 barrels left the reserve in the latest week, dragging it to 282.7 million barrels, near the generally accepted operational minimum of 250 to 300 million barrels. Products drew as well: gasoline down 2 million barrels and distillates down 2.6 million barrels, with distillate inventories already 12 percent below the five year average heading into the reporting period. Cushing stocks, the delivery hub for the WTI contract, rose 900,000 barrels. US production for the week ending October 9 slipped to 13.679 million barrels a day.
Kpler counted at least 18 vessel attacks in two weeks, and LSEG analysts warned Iran was targeting tankers beyond Hormuz into the Gulf of Oman, jeopardising the ship to ship transfers that have supported recent flow recovery. ANZ analysts said buffers are being exhausted: US inventories are nearing minimum levels while China’s ability to keep imports low will be tested as seasonal demand picks up. The EIA’s weekly figures, which follow the API numbers with a day’s lag, are the next scheduled confirmation.