Crude oil prices moved into the black Wednesday, reversing two days of losses, following a smaller-than-expected build in U.S. inventories, Kallanish Energy reports.
Prices also moved higher as Iran-related tensions escalated, but receding hopes for a quick solution to the U.S.-China trade war which has lowered global growth held down prices, Reuters reported.
West Texas Intermediate crude futures gained $1.04, or 1.9%, to trade at $56.25 a barrel. Brent crude futures ended Wednesday’s trading session at $61.97/Bbl, up $1.06, or 1.7%.
Crude oil inventories in the U.S. increased 1.4 million barrels (Mmbbl) from the prior week, the Energy Information Administration reported Wednesday. The American Petroleum Institute Tuesday projected inventories would climb by 6 Mmbbl. (See story elsewhere in this issue.)
The U.S. aircraft carrier strike group Abraham Lincoln Tuesday sailed through the Strait of Hormuz through which 20% of the world’s oil flows, as leaders in Iran blamed days of protests over fuel price hikes on foreign enemies, Reuters reported.
Tensions in the Gulf have risen since attacks on oil tankers this summer, including off the coast of the United Arab Emirates, and a major attack on key Saudi facilities, which briefly crippled 50% of production from the world’s top oil exporter.
U.S. crude demand has slowed during a protracted trade war with China. Hopes for an end to the dispute in the signing of a so-called Phase One agreement have dimmed amid disagreements over the removal of tariffs.