Oil prices held gains after an industry report showed U.S. crude inventories fell, while traders monitored progress toward new sanctions on Iran.
Brent crude settled above $88 a barrel after rising 1.6% on Tuesday, while West Texas Intermediate crude topped $83. The American Petroleum Institute reported that U.S. crude inventories fell by 3.2 million barrels last week. If official data is confirmed later on Wednesday, that would be the first decline in five weeks.
Meanwhile, the US House of Representatives has approved tougher measures against Iran in response to the attack on Israel, and the Senate is set to ratify them. While some Asian refiners are bracing for increased scrutiny, the move is not expected to have a major impact on the market.
Impact of geopolitical risks
Crude oil has been on the rise this year, supported by supply cuts from OPEC+, as well as geopolitical risks in the Middle East and Russia. Traders are also looking at the outlook for U.S. monetary policy, with slowing U.S. business activity growth seen as bullish as it fuels expectations of lower interest rates. The Fed’s preferred inflation gauge is due later this week.
The American Petroleum Institute also reported a decline in overall gasoline levels, while crude stocks at the Cushing, Oklahoma, hub shrank.
