Both oil benchmarks broke a three-session streak of declines on Tuesday.
Oil prices rebounded from monthly lows on Wednesday on concerns that an escalating conflict in the Middle East could hurt oil production, while concerns remained about weak demand for crude.
Brent crude futures rose $1.42, or 1.9 percent, to $77.90 a barrel by 1310 GMT. U.S. West Texas Intermediate crude rose $1.48, or 2 percent, to $74.68.
On Monday, Brent futures fell to their lowest since early January and WTI futures hit their lowest since February, as global stock markets slumped on concerns about a possible US recession following weak employment data.
“Whether the reversal in risk asset prices will prove to be merely a bottom before the sell-off continues, or whether investors have taken time to fully assess the medium-term implications of the US jobs data, is still a matter of debate,” said Tamas Varga of oil broker PVM.
Both oil benchmarks broke a three-session streak of declines on Tuesday as tensions in the Middle East continued to fuel supply-side concerns during Wednesday’s trading session.
The Middle East is bracing for a possible new wave of attacks by Iran and its allies following the killing last week of senior members of the militant groups Hamas and Hezbollah. Concerns are growing that the conflict in Gaza is developing into a wider war in the Middle East.
U.S. officials are in constant contact with allies and partners in the region and there is a “clear consensus” that no one should escalate the situation, Secretary of State Antony Blinken said Tuesday.
“An escalation of the Middle East conflict could lead to increased risk of supply disruptions from the region,” said ANZ analyst Daniel Hynes.
Prices fell earlier in trading on Wednesday after U.S. data showed an unexpected rise in crude oil and gasoline inventories.
US crude oil, gasoline and distillate inventories rose last week, according to market sources citing figures from the American Petroleum Institute on Tuesday. (API/S)
The U.S. Energy Information Administration will release weekly inventory data at 10:30 a.m. (1430 GMT) on Wednesday.
The negative demand view was supported by Chinese trade data showing daily crude oil imports fell in July to the lowest level since September 2022.
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First print: Aug 07, 2024 | 7:50 PM IST