Oil prices rebound as Hormuz shipping risks persist
Key points
- Brent crude rose 0.6% to US$92.01 per barrel, while US West Texas Intermediate increased 0.2% to US$86.20 after both benchmarks fell to two-month lows.
- Attacks on vessels in the Strait of Hormuz and concerns about naval mines continued to raise uncertainty over Middle Eastern oil shipments.
- Rising US crude inventories and expectations of a possible diplomatic agreement between Washington and Tehran limited gains, while Ukrainian drone attacks reduced Russian refining capacity.
Oil prices rose on Wednesday, with Brent crude reaching US$92.01 per barrel and West Texas Intermediate climbing to US$86.20, as concerns about shipping attacks in the Strait of Hormuz offset hopes for a diplomatic breakthrough in the US-Israeli war on Iran.
Brent futures gained US$0.52, or 0.6%, while WTI added US$0.16, or 0.2%, recovering part of the previous session's losses after both benchmarks reached two-month lows.
"There has been an increase of vessel attacks in the Gulf shipping lanes amidst uncertainty of the diplomacy talks," said June Goh, senior analyst at Sparta Commodities.
The Washington Institute for Near East Policy reported that 37 ships were attacked in October, the highest monthly total since the Middle East war began, while the American Petroleum Institute's latest data showed US crude inventories increased by 9 million barrels in the week ended November 6.
LSEG Oil Research said that even if a diplomatic agreement is reached, increased shipping through the Strait of Hormuz would depend on mine clearance, insurance costs and shipowners' willingness to resume operations.
At 0730 GMT on Wednesday, Brent crude was up 0.6% at US$92.01 per barrel, while WTI traded 0.2% higher at US$86.20.
Meanwhile, Russian oil refining capacity has fallen by approximately 30% since late October following renewed Ukrainian drone attacks, while Russian and Ukrainian officials held peace talks in Abu Dhabi on Tuesday.
