Oil prices increased on Wednesday 4 November as investors monitored developments following the US midterm elections, which resulted in Democrats securing majorities in both houses of Congress.
By 07:30 GMT, Brent crude futures were up $0.76, or 0.7%, trading at $104.36 a barrel, reported Reuters.
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Meanwhile, US West Texas Intermediate (WTI) crude futures gained $0.63, or 0.7%, to $96.72, reversing a previous decline.
The session followed a period of volatility, with Brent crude having ended the previous day at its lowest in nearly four weeks, as traders weighed ongoing discussions aimed at resolving wars involving Ukraine and Iran.
In October, oil prices neared $120 per barrel, levels last seen in the war’s early stages, as markets priced in another escalation cycle. A recent GlobalData TS Lombard report, authored by Christopher Granville, argues the rally largely discounts the expected post-midterm escalation.
The report forecasts the next significant price move will be downward towards $80 per barrel, while a surge through $150 remains a tail risk.
Granville further noted that the double-handling cost of rerouting cargoes through the Strait of Hormuz has driven very large crude carrier (VLCC) freight rates to more than five times pre-war levels, keeping prices elevated for Asian refineries.
Tensions in the Middle East remained in focus after US officials reported conducting “defensive” strikes on Iran’s Qeshm Island, which targeted surface-to-air missiles.
One official, as cited by the news agency, described the operations as limited and stated there was no indication of an escalation into larger combat activities.
Diplomatic talks to end the US-Israeli war with Iran continued, with Qatar intensifying mediation efforts to prevent further escalation after the election results.
Despite these efforts, a senior Iranian official told Reuters that Iran and the US were still far from reaching an agreement to end the hostilities.
In the oil market, industry data showed US crude inventories fell by 5.27 million barrels (mbbl) for the week ended 30 October, according to market sources citing the American Petroleum Institute.
Gasoline inventories rose by 1.43mbbl, while distillate stocks declined by 1.19mbbl.
Gulf oil exports were reported lower in October compared to September, which was the highest export level since the start of the Iran war, according to two ship-tracking firms.
Both companies indicated the figures could increase as more shipment data becomes available.
Tankers have increasingly sought to avoid detection amid increased attacks on shipping near the Strait of Hormuz, complicating efforts to monitor oil flows and increasing the likelihood of further revisions to export data.
Data from Kpler also showed a decline of about one million barrels per day (mbbl/d) in crude and condensate shipments from September, though an upward adjustment was considered likely
