Crude oil prices posted notable gains on Thursday as fresh data on U.S. inventory levels and renewed geopolitical friction in the Middle East signaled tightening global supply. Investor sentiment improved after the U.S. Energy Information Administration (EIA) reported an unexpectedly sharp drawdown in national crude reserves, while Washington’s potential involvement in Israel’s military deliberations on Iran further stoked market volatility.
Brent crude, the international oil benchmark, climbed 0.8% to settle at $75.77 per barrel, up from the previous close of $75.12. U.S. benchmark West Texas Intermediate (WTI) also rallied by 1.2%, closing at $73.83 per barrel compared to $72.98 from the earlier session.
The EIA’s latest figures revealed that U.S. commercial crude inventories plummeted by 11.5 million barrels last week, far exceeding analyst expectations of a 2.3 million barrel drop. The draw brought total reserves down to 420.9 million barrels, roughly 10% below the five-year seasonal average—an indicator of rising demand in the world’s largest oil-consuming nation.
Tensions in the Middle East added another layer of concern for global markets. Axios reported that former U.S. President Donald Trump queried his advisers on the feasibility of using bunker buster bombs to destroy Iran’s Fordow nuclear site. Citing anonymous officials, the report said the Pentagon affirmed the effectiveness of such an operation, although it remains unclear whether Trump was convinced to act.
ABC News added that Trump had shown interest in launching targeted strikes on Fordow, with indications that some operational planning may have already commenced.
These developments come at a time of heightened scrutiny over the region, which holds a substantial portion of the world’s oil reserves. Analysts warn that escalating hostilities between Israel and Iran could significantly disrupt global energy supplies, potentially pushing prices even higher.
Meanwhile, the U.S. Federal Reserve’s decision to keep interest rates steady at 4.25% to 4.50% also played a role in oil price momentum. Following the two-day Federal Open Market Committee (FOMC) meeting, the Fed cited persistent labor market strength and elevated inflation as reasons for maintaining current monetary policy. Some market observers anticipate that rate cuts may still occur twice in the year, which could weaken the dollar and further stimulate oil demand.
SOURCE: BizWatchNigeria