Oil prices rise on Middle East conflict fears, but gains trimmed by US crude inventories and bleak European outlook

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Oil prices rose about 2 percent on Wednesday, supported by fears of conflict in the Middle East, but gains were trimmed by a rise in US crude inventories and a bleak economic outlook in Europe.

Brent crude futures rose $2.06, or 2.34 percent, to $89.14 per barrel upon settlement. West Texas Intermediate crude rose $1.65, or 1.97 percent, to $85.39 per barrel upon settlement.

The US Energy Information Administration said on Wednesday that crude inventories in the United States increased by 1.4 million barrels last week to 421.1 million barrels, exceeding an increase of 240,000 barrels expected by analysts in a Reuters poll.

Data from the European Central Bank showed today that bank lending in the euro zone almost stopped last month, providing further evidence that the 20-nation bloc is on the brink of recession.

Demand for crude may get a boost from the world’s largest oil importer, China, which approved a draft law to issue sovereign bonds worth one trillion yuan ($137 billion) and allow local governments to issue new debt from their 2024 quota to boost the economy. But Beijing has also taken steps that may reduce demand for crude oil, such as capping oil refining capacity at one billion tons by 2025 to facilitate the work of its huge oil processing sector and reduce carbon emissions.

2023-10-25 20:03:01
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