Oil continued to rise on Wednesday over worries that the escalating conflict in the Middle East could threaten oil supplies.
Brent futures rose 34 cents, or 0.46% to settle at $73.90 per barrel while the US West Texas Intermediate (WTI) crude climbed 27 cents, or 0.39%, to settle at $70.10 per barrel.
Meanwhile, Israel and its ally, the US vowed payback for the attack, a sign that conflict in the region is intensifying after Iran fired more than 180 missiles at Israel, its biggest-ever direct attack on the country on Tuesday.
Since the late Tuesday bombing, Israeli ground troops have fought with Hezbollah in southern Lebanon, with Israeli Prime Minister Benjamin Netanyahu vowing vengeance and raising fears of a full-fledged conflict.
According to rumors, Israel’s reaction might include hitting Iranian oil production facilities and other critical targets.
On Wednesday, Iran said that its missile attack on Israel was stopped, barring further provocation.
It claimed that any Israeli retaliation to its attack would result in widespread destruction as Iran accounts for around 4% of world oil output.
Analysts say that an attack on Iran’s oil infrastructure could provoke it to respond with a strike on Saudi oil facilities, similar to one conducted in 2019 on crude processing facilities there.
Meanwhile, a meeting on Wednesday of the top ministers of the Organisation of the Petroleum Exporting Countries and its allies, OPEC+ kept oil output policy unchanged.
The group is set to raise output by 180,000 barrels per day each month from December.
Meanwhile, the US Energy Information Administration (EIA), the official US agency, reported an estimated inventory build of 3.9 million barrels for the week to September 27, driven by the latest escalation in the Middle East.
The inventory change compared with a draw of 4.5 million barrels for the previous week, which also saw declines in fuel inventories.
It also compared with the American Petroleum Institute’s estimate, which pegged crude oil inventory change for the final week of September at a negative 1.5 million barrels.