Oil traded both ways on Wednesday as investors tried to price a changed Washington against an unchanged physical market. Brent futures rose 76 cents, or 0.7 percent, to 104.36 dollars a barrel by 0730 GMT and West Texas Intermediate gained 63 cents to 96.72 dollars, reversing earlier declines, Reuters reported. Invezz, tracking the later European session, had Brent slipping back about 1.26 percent to near 102.20 dollars, and the site market tables put Brent at 102.03 dollars, down 1.52 percent on the day and down 11.52 percent on the week.
The political trigger was the midterm result. Democrats captured both chambers of Congress, which traders read as a constraint on funding or expanding the war with Iran and a reason to trim the supply risk premium. Priyanka Sachdeva of Phillip Nova told Reuters that conflicting signals from President Trump, with strikes continuing alongside statements downplaying escalation, had made it difficult to build directional conviction, and that some profit taking after the October rally was justified.
The physical data pulled the other way. Market sources citing American Petroleum Institute figures said US crude stocks fell by 5.27 million barrels in the week ended October 30, against a Reuters poll expectation of a rise of about 880,000 barrels. Gasoline stocks rose by 1.43 million barrels and distillate stocks fell by 1.19 million barrels, a combination Haitong Futures described as broadly supportive, with diesel inventories still tight.
Underneath the price action, the Hormuz constraint has not lifted. A senior Iranian official told Reuters on Tuesday that Tehran and Washington remained far from a deal, the United States had carried out defensive strikes on Qeshm Island, and reported oil throughput through the strait remains well below pre conflict levels. The official EIA inventory report, due at 10:30 a.m. EST on Wednesday, is the next test of whether the API draw is confirmed.