Oil prices rose on Wednesday after reversing earlier losses, as investors monitored developments in the war involving Iran and awaited signals from Washington following the US midterm elections.
Brent crude futures gained 82 cents, or 0.8%, to reach $104.42 a barrel. US West Texas Intermediate (WTI) crude rose 50 cents, or 0.5%, to $96.59 a barrel.
The gains came after Brent settled at its lowest level in nearly four weeks during the previous session, as traders assessed diplomatic efforts to end the wars in Ukraine and Iran.
US Election Adds Uncertainty
The election results added another factor for energy markets, with Democrats capturing majorities in both houses of Congress, according to the supplied election report.
Investors were also trying to assess the direction of US policy towards Iran as President Donald Trump issued mixed signals about the possibility of further military action.
“President Trump’s conflicting signals, with military strikes continuing alongside statements downplaying further escalation, have made it difficult for traders to build strong directional conviction,” said Priyanka Sachdeva, head of market insights at Phillip Nova.
Sachdeva said some investors were taking profits and reducing speculative positions following the sharp rally in October. However, she warned that supply disruption risks around the Strait of Hormuz remained a concern.
Iran Conflict Keeps Supply Risks in Focus
A US official said Washington had carried out what it described as defensive strikes on Iran’s Qeshm Island on Tuesday, targeting surface-to-air missiles allegedly used against US assets.
Another US official said the strikes appeared limited and did not indicate a return to major combat operations.
Meanwhile, markets continued to watch diplomatic efforts aimed at ending the US-Israeli war with Iran. Qatar has stepped up mediation efforts to prevent further escalation.
Oil Prices Edge Higher After Reported US Strikes on Iran’s Qeshm Island
However, a senior Iranian official told Reuters on Tuesday that Tehran and Washington remained far from reaching an agreement to end the conflict.
US President Donald Trump also told the Financial Times that Washington had no immediate plans to strike Iran.
US Crude Inventories Fall
Supply data provided additional support to oil prices. US crude inventories fell by 5.27 million barrels during the week ended October 30, according to figures from the American Petroleum Institute cited by market sources.
The decline was significantly different from expectations. Eight analysts surveyed by Reuters had forecast an average increase of approximately 880,000 barrels.
Gasoline inventories increased by 1.43 million barrels, while distillate stocks, which include diesel, declined by 1.19 million barrels.
Haitong Futures said diesel inventories remained tight, while gasoline stocks had increased more than expected. The firm described the overall data as supportive of oil prices.
Official US Data Awaited
Traders were awaiting the latest figures from the US Energy Information Administration, scheduled for release at 10:30 am Eastern Time on Wednesday.
The official inventory report was expected to provide further insight into US fuel demand and supply conditions.
For now, oil markets remain sensitive to developments in the Iran conflict, diplomatic negotiations and the security of shipments through the Strait of Hormuz, a key route for global energy supplies.
