Crude stocks swelled by 5.4 million barrels, surprising analysts who had expected a decrease of 800,000 barrels. The build was still smaller than the 9 million-barrel build estimated on Tuesday by the American Petroleum Institute. Distillate stocks were relatively flat and gasoline stocks drew 1.1 million barrels. Oil futures inched up on Wednesday as the prospect of mounting tensions in the Middle East hitting global supplies overshadowed the big build in U.S. crude inventories.
Oil prices have drawn support since Saudi Arabia said on Tuesday that armed drones struck two oil pumping stations, two days after the sabotage of oil tankers near the United Arab Emirates. Washington ordered the departure of non-emergency American employees from its diplomatic missions in Iraq on Wednesday in show of concern about threats from Iran-backed forces.
What to Watch Today
Oil prices started the early morning higher in continuation of yesterday’s price action. It appears that Middle East tensions have taken center stage once again and oil is drawing support from the risk of conflict. Both Saudi Arabia and the U.S. have made comments stating that Iran is to blame for the infrastructure attacks, so be on the lookout for further developments. OPEC’s JMMC committee will meet this weekend and although they do not set strategy at these meetings, their findings on the balance or imbalance of the current oil market could help to move prices.