Oil futures rose more than $1 per barrel on Wednesday after falling to seven-week lows due to escalating Middle East tensions: Hamas leader Ismail Haniyeh was assassinated in Iran. Brent crude futures rose 1. 17, or 1. 5%, to 79. 80 a barrel and the more active October contract was up 1. 11 to 79. 18. WTI futures on the NYME hit $ 75. 88 per barrel from $74. 73 a barrel, up by $1. 15 or 1. 5%. They had both fallen around 1. 4% the previous day to their lowest levels in more than a month in the case of both benchmarks.
Conflict in the Middle East continued to escalate after news emerged of Haniyeh’s death which was stated by both; Hamas and Iran’s official media. This escalation comes after an Israeli attack which many suggested killed Hezbollah’s top commander in revenge for a cross-border rocket attack on Israel. This has happened despite interventions from the US and the UN aimed at reducing the aggression; the US too launched an aggression in Iraq.
IG analyst Tony Sycamore pointed out that all these events have compounded the probability of more escalation in the area. Due to the collapsing prices of crude oil during three successive weeks, the number of speculative positions has been greatly decreased; thus, the circumstances have been created for the stabilization of prices.
Although the two markers have only started their rally recently, Brent and WTI are both on track to post their largest monthly decline since 2023. This is mainly because the market has continuously mulled over the potential of fragile demand from China which is the largest importer of crude oil globally. Chinese manufacturing contracted for the third month in July boosting calls for more stimulus.
Crude, gasoline, and distillate inventories dropped last week in America, API reveals. Other data later in the day comes from the Energy Information Administration, and analysts estimate crude stockpiles fell by about 1. 1 million barrels in the week ending July 26.