NEW YORK: Oil prices rose about 2% on Wednesday (Oct 25), buoyed by worries about conflict in the Middle East, but gains were capped by higher US crude inventories and gloomy economic prospects in Europe.
Brent crude futures rose US$2.06, or 2.34%, to settle at US$90.13 (RM430.73) a barrel. US West Texas Intermediate (WTI) crude futures rose US$1.65, or 1.97%, to close at US$85.39 (RM408.07) a barrel.
Prices fell early in the session but reversed declines on heightened geopolitical risk, said Price Futures analyst Phil Flynn.
Weaker prices in the oil physical markets suggest the rise in prices over the past few weeks may come to an end as demand woes weigh.
US crude inventories rose by 1.4 million barrels in the last week to 421.1 million barrels, the Energy Information Administration (EIA) reported on Wednesday, higher than analysts’ expectations in a Reuters poll.
“The crude build is a bit of a surprise and gasoline (petrol) demand is barely hanging in there,” said John Kilduff, a partner at Again Capital LLC, in New York.
The conflict between Israel and Hamas raged on, raising concern that if it widened across the Middle East, oil supplies could be disrupted in a market already undersupplied given protracted Opec+ cuts.
Crude prices could also find support as the top parliament body in China, the world's biggest oil importer, approved a bill to issue 1 trillion yuan (RM653.2 billion) in sovereign bonds and allow local governments to issue new debt from their 2024 quota to boost the economy.
But demand for crude oil in China could be limited as Beijing put a ceiling for its oil refining capacity at 1 billion metric tons by 2025 to streamline its vast oil processing sector and curb carbon emissions. – Reuters
