On October 28, international crude oil prices climbed as a fresh round of Houthi attacks on Saudi energy facilities heightened market concerns that Middle East tensions could escalate once again.
As of 18:43 Beijing time on October 28, Brent crude futures were up 0.7% at US$114.67 a barrel, while U.S. WTI crude futures rose 1.3% to US$101.14 a barrel.
Earlier, international oil prices briefly broke above US$117 a barrel last week, hitting a six-month high, before pulling back for two consecutive trading sessions.
Houthi Attacks on Saudi Energy Facilities Put Middle East Tensions Back in Focus
On October 27, the Houthis announced they had used ballistic missiles to attack Saudi Arabia's Ras Tanura refinery.
Previously, the Houthis were also reported to have attacked pumping stations along Saudi Arabia's east-west oil pipeline and Riyadh's King Khalid International Airport.
Saudi Arabia's east-west pipeline is a key route for the country to export crude without passing through the Strait of Hormuz. The successive attacks on related facilities have fueled market worries that Middle East energy transportation could once again face serious disruption.
Just one day before the attacks, representatives from Saudi Arabia, Turkey and Pakistan had just held talks with Iranian officials in Tehran, where all parties agreed to continue promoting regional peace and security through dialogue.
However, the new wave of attacks weakened market expectations for a diplomatic thaw.
Analysts at ING believe that the recent sustained rise in oil prices shows the market is raising its risk expectations for another escalation of Middle East conflict.
Unexpected Drop in U.S. Crude Inventories Further Supports Oil Prices
Beyond the Middle East situation, an unexpected decline in U.S. crude inventories also provided support for oil prices.
Data released by the American Petroleum Institute (API) on October 27 showed that U.S. crude inventories fell by 2.03 million barrels in the week to October 23, while the market had previously expected an increase of 800,000 barrels.
This marked another notable decline in U.S. crude inventories after a drop of 4.93 million barrels in the previous week.
However, refined product inventories increased, with gasoline inventories rising by 2.39 million barrels and distillate inventories up by 380,000 barrels.
Investors will next focus on official inventory data to be released later on October 28 by the U.S. Energy Information Administration (EIA) to further assess supply and demand conditions in the U.S. oil market.
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