Oil prices rose to near $100 again during a volatile session as traders weighed rising Middle East supplies against the possibility of renewed escalation.
Brent crude for December delivery briefly surpassed $100 a barrel after fluctuating between gains and losses, while West Texas Intermediate crude exceeded $92.
Analysts and traders on Wall Street said that crude flows from the Middle East are approaching pre-war levels, although fuel supplies have not recovered to the same extent.
Oil prices rose for the third consecutive month in September after Washington and Tehran failed to make progress toward a lasting peace agreement that would fully reopen the Strait of Hormuz. President Donald Trump stated at the White House that the United States has complete control of the waterway and will respond to Iran soon.
Determining the quantities of crude oil that producers in the Arabian Gulf are pumping into the market has become more complicated due to the Iran war, including attacks on commercial vessels, as well as attacks on the Saudi East-West pipeline.
Goldman Sachs Group estimates that around 23 million barrels per day of oil left the Middle East last week, either through the Strait of Hormuz or via other export routes such as the Red Sea. This is in line with last year's average.
Bloomberg analysts' opinion: NEF
Bloomberg analysts BNF Wayne Tan, Victoria Shaw, and Yuen Yin believe that Gulf exports have recovered through security-escorted transits and alternative routes, but inventories have fallen by more than 500 million barrels since February, leaving little reserve to counter any further disruption.
Oil prices fluctuate due to uncertainty surrounding the Iran war.
Months of intermittent negotiations to end the war, launched by the United States and Israel in February, have led to sharp fluctuations in oil futures prices, making it difficult for traders to take positions in anticipation of significant price movements. Fuel markets have also experienced a severe shortage, which is supporting demand for crude oil as refineries attempt to produce as many barrels as possible.
U.S. oil inventory data released Wednesday did little to improve the picture. The Energy Information Administration reported that distillate stocks were at their lowest seasonal level on record, amid speculation about whether the White House will proceed with a complete ban on diesel exports. Gasoline inventories in the U.S. Midwest were also at a record low.
Energy Secretary Chris Wright said on Wednesday that Europeans would soon announce new diesel supplies arriving on the market. Meanwhile, Trump said he was considering the potential negative consequences of banning fuel exports.
Latest oil price movements
Brent crude futures for December settlement jumped 2% to $99.89 a barrel at 9:02 a.m. in London.
The price of West Texas Intermediate crude oil futures for November delivery rose 2.1% to $92.34 a barrel.
