The price of oil on Wednesday reached $115.36 following the attack on Saudi Arabia's largest oil refinery, which has a daily refining capacity of 550,000 barrels of oil. This attack on the refinery occurred amid rising tensions in the Middle East and an increase in attacks on Saudi Arabia, the world's second-largest crude oil producer, raising concerns about disruptions in oil supply.
Increase in crude oil prices
The price of Brent crude futures rose by $1.48, equivalent to a 1.3% increase, reaching $115.36 per barrel. Additionally, West Texas Intermediate crude oil also increased by $1.22, or 1.22%, reaching $101.12 per barrel.
Read more: Qatar Energy halted LNG deliveries to Edison Italy
The attack on the Saudi refinery, carried out by the Houthi group from Yemen, occurred as reports indicated an increase in attacks on the country's oil facilities. This attack caused oil prices to resume their upward trend despite a nearly $2 drop on Tuesday. Additionally, recent negotiations in the Middle East had helped alleviate concerns about oil supply.
U.S. crude oil inventories and their impact on the market
The increase in oil prices comes as data is expected to show growth in U.S. crude oil inventories. According to a Reuters survey of eight analysts, U.S. crude oil inventories increased by about 15,000 barrels in the week ending October 23. This data could influence market sentiment and serve as a balancing factor against rising geopolitical risks.
OPEC+ oil-producing countries are likely to maintain their oil production targets for December unchanged at their meeting on Sunday. This action aligns with market expectations and may help stabilize prices. While oil production in most of the seven main members of this coalition, including Saudi Arabia, Russia, Iraq, Kuwait, Algeria, Kazakhstan, and Oman, is below set targets, this could lead to greater volatility in the oil market.
Traders also reported that Russian crude oil exports from Baltic and Black Sea ports may decline next month. This possibility arises as Russian domestic refineries increase diesel production following the country's agreement with Washington earlier this month, which may lead to a reduction in some of their crude oil exports.
Read more: Increase in gasoline demand in India to the highest level by 2035 · Decrease of 1.9 million barrels in U.S. crude oil inventories last week
