Crude futures advanced in early Asian trading on Wednesday as renewed attacks on Saudi Arabia raised concerns over regional supplies, OilPrice.com reported. Brent was up 1.62% at $115.70 a barrel at the time of the report, while West Texas Intermediate gained 1.34% to $101.20. Lower US crude inventories and reports of possible further military action against Iran also supported prices.
The gains followed a decline of almost $2 on Tuesday, when expectations of progress in talks involving Saudi, Turkish, Pakistani and Iranian officials weighed on the market. Attention subsequently shifted to Ras Tanura, where the Houthis claimed on Tuesday to have hit the 550,000-barrel-a-day refinery with a ballistic missile. The complex also includes an important Persian Gulf oil export terminal.
Saudi authorities had not confirmed a direct strike on the refinery when OilPrice.com published its report. Nor was there independently verified evidence of extensive damage or a significant operational interruption. Reports indicated that a fire close to Saudi Aramco facilities at Ras Tanura had been brought under control after an attack in the area early Tuesday, but the scale of any damage remained uncertain.
Elsewhere, Saudi officials reported intercepting three ballistic missiles headed towards the Eastern Province and four drones targeting southern Saudi Arabia. Two missiles aimed at Riyadh were also intercepted. According to Saudi Civil Defense statements carried by the Associated Press and cited by OilPrice.com, falling debris damaged a building, a construction site and a vehicle in the capital.
Adding to supply concerns, OilPrice.com cited a Wall Street Journal report saying Washington had warned several Gulf Arab countries to prepare for a possible brief, intensive military campaign after the 3 November US midterm elections. The report concerned potential renewed action against Iran, rather than an announced operation.
US stock data provided a separate source of support. OilPrice.com reported that the American Petroleum Institute estimated a crude inventory draw of about 2.03 million barrels in the week to 23 October. Increases in petrol and distillate stocks partly offset that bullish signal. Wednesday’s Energy Information Administration inventory release was the next focus for traders seeking confirmation of the stock movements.