Oil shoots up from its lowest level in 33 months due to the war between Israel and Iran, Brent rises 3% to $74; China demand, US inventories cap profits

International crude oil prices rose three percent before halting their gains on Wednesday, October 2, amid concerns that the escalation of conflict in the Middle East due to the Israel-Iran was could threaten oil supplies in the world’s most productive region. However, a large buildup of crude oil inventories in the United States limited gains.

Brent Futures They were last up 84 cents, or 1.14 percent, at $74.40 a barrel. U.S. West Texas Intermediate (WTI) crude rose 87 cents, or 1.25 percent, to $70.70 a barrel. At home, crude oil futures last traded 2.75 percent higher in $5,900 per barrel on the commodity exchange (MCX). Brent hit its lowest level in 33 months Before the war between Israel and Iran they supported the upward trend in prices.

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-On Tuesday, Iran fired more than 180 missiles at Israel, the largest direct attack in its history against the country. Israel and the United States vowed retaliation for the attack, a sign that the conflict in the region is escalating.. Israel’s retaliation could include attacking Iranian oil production facilities, among other strategic sites, US news website Axios reported, citing Israeli officials.

-On Wednesday, Iran said its missile attack on Israel was over, barring further provocations. He added that any Israeli response to their attack would cause widespread destruction. An attack on Iran’s oil infrastructure could prompt Tehran to respond with an attack on Saudi oil facilities, similar to one carried out in 2019 against crude oil processing facilities there.

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-Analysts said that any of these events would inevitably cause a considerable increase in oil prices. In another escalation of the conflict, the Israeli military on Wednesday sent regular infantry and armor units to join ground operations in southern Lebanon against Iran-backed Hezbollah.

-The United Nations Security Council scheduled a meeting on the Middle East for Wednesday and the European Union called for an immediate ceasefire. Analysts added that Iran’s oil production rose to a six-year high of 3.7 million barrels per day (bpd) in August.

-“A major escalation by Iran risks pushing the United States into war,” Capital Economics says in a note. “Iran accounts for about four percent of global oil production, but an important consideration will be whether Saudi Arabia increases production if Iranian supplies are disrupted.”

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-Offsetting earlier gains, crude oil inventories increased by 3.9 million barrels to 417 million barrels in the week ending September 27, the Energy Information Administration (EIA) said. Gasoline stocks also rose last week, but distillate inventories fell.

-On Wednesday, meeting of the main ministers of the Organization of Petroleum Exporting Countries. (OPEC) kept its oil production policy unchanged. The group will increase production by 180,000 bpd each month starting in December.

-The Wall Street Journal reported Wednesday, citing oil producers’ group delegates, that Saudi Arabia’s oil minister said oil prices could fall as much as $50 a barrel if OPEC members don’t respect limits. agreed production rates.