Oil Prices Increase Amid Fears of Israel-Iran Conflict and U.S. Storm, Reports Reuters

Oil Prices Rise Amid Middle East Tensions and Storm Impact

Oil prices increased in early Asian trading on Thursday due to escalating concerns over potential supply disruptions in the Middle East, particularly with Israeli plans to target oil-producing Iran. Additionally, spikes in fuel demand were reported as a significant storm approached Florida.

Brent crude futures climbed by 37 cents, or 0.5%, reaching $76.95 a barrel. Meanwhile, U.S. West Texas Intermediate (WTI) futures also rose by 35 cents, equating to a 0.5% increase, settling at $73.59 a barrel.

The United States, the world’s largest oil producer and consumer, is dealing with the effects of Hurricane Milton, which has struck Florida’s west coast, bringing tornadoes and the threat of surging seawater. This storm has heightened gasoline demand within the state, with approximately 25% of fuel stations reported to have run out of supplies, further bolstering crude oil prices.

Investor sentiment remains cautious due to the possibility of heightened tensions between Israel and Iran. Israeli Defense Minister Yoav Gallant has stated that any strike on Iran would be "lethal, precise and surprising." U.S. President Joe Biden also held a 30-minute conversation with Israeli Prime Minister Benjamin Netanyahu on Wednesday regarding these developments, which the White House characterized as "direct and very productive."

Despite these geopolitical tensions affecting the oil-producing region, weak demand continues to influence the fundamental outlook for oil. The U.S. Energy Information Administration (EIA) recently lowered its demand forecast for 2025, citing a slowdown in economic activity in both China and North America.

Additionally, EIA data released on Wednesday indicated that crude inventories surged by 5.8 million barrels, bringing total stocks to 422.7 million barrels. This increase was larger than analysts’ expectations, although it was lower than the estimates provided earlier by the American Petroleum Institute.