The price of oil increased by about 0.5%, helped by data on oil reserves in the United States. Investors also continued to monitor the situation in the Middle East.
The American Petroleum Institute (API) said that in the week ended Aug. 9, U.S. oil reserves fell by 5.205 million barrels, while economists had forecast a decrease of 2 million barrels. Lower inventories may indicate higher demand in the United States, the world's largest oil consumer. Meanwhile, gasoline inventories fell by 3.689 million barrels after rising by 3.31 million barrels a week earlier. Analysts had predicted a 1.1 million barrel draw. Distillate inventories saw an increase of 612,000 barrels, on top of last week’s 1.22-million-barrel increase. Analysts had forecast a 1.8 million barrel draw. Cushing inventories saw a draw of 2.277 million barrels after rising by 1.07 million barrels a week earlier. Later today (at 14:30 GMT), official data from the Energy Information Administration will be published.
As for the situation in the Middle East, Iran has not yet retaliated against the assassination of a Hamas official in its capital. But experts warned that any escalation of the conflict in the Middle East poses a clear risk of higher oil prices over the next six months, with the scale of Iran's response, as well as Israel's reaction, likely to determine whether the current conflict escalates into a regional conflict.
"If a larger conflict develops in the Middle East, it is likely to jeopardize not only Iranian supplies, but also oil transported through key bottlenecks in the Middle East. This could put more than 20 million barrels of oil per day at risk of outages," ANZ Research analysts said.