Oil extended its gains on Thursday after reversing early losses, with Brent up 2.6% at $93.10 a barrel. Traders weighed a fresh wave of U.S. strikes on Iranian targets against U.S. crude inventories that fell 7.2 million barrels to their lowest level since 2018.
Crude prices pushed higher on Thursday, reversing early losses as investors weighed fresh U.S. strikes on Iran alongside data showing a sharp drop in American crude stockpiles. As of 03:05 ET, Brent futures expiring in September climbed 2.6% to $93.10 per barrel, while West Texas Intermediate rose 1.3% to $85.57.
Both benchmarks built on the previous session, when Brent surged nearly 8% and WTI settled 6.6% higher. Thursday's trade stayed volatile.
U.S. strikes dozens of IRGC sites across Iran
The U.S. military said late on Wednesday it had carried out a heavy wave of strikes against dozens of Islamic Revolutionary Guard Corps targets across Iran, hitting military command centers, missile and drone facilities, coastal surveillance and defense sites. That move followed Iranian ballistic missiles launched toward U.S. forces in the Middle East, which ended hopes for a diplomatic breakthrough.
Those missiles were intercepted, after which U.S. and Saudi forces struck Iran-backed militias in Iraq that Washington said had taken part in attacks on American troops and Saudi energy infrastructure. President Donald Trump had told Fox News that Iran would be hit very hard after Tehran's missile attack on U.S. forces in Jordan.
Shipping chokepoints stay disrupted
In Yemen, the Iran-aligned Houthis have intensified attacks on commercial shipping and Saudi-linked energy assets around the Red Sea and Bab el-Mandeb Strait, seeking to enforce what the group calls a naval blockade. Meanwhile, traffic through the Strait of Hormuz remains well below normal levels.
Egyptian authorities reported drone strikes on two natural gas vessels operating off the country's coast. Separately, the Caspian Pipeline Consortium suspended oil loadings after a drone attack on a tanker, according to the Russian news agency Interfax.
According to Reuters, Vanda Insights founder Vandana Hari attributed the buying to European hours: "Europe is waking up to the news of the U.S. attacks, so buying up".
Crude inventories hit lowest level since 2018
The U.S. Energy Information Administration reported that crude inventories fell by 7.2 million barrels last week to the lowest level since 2018, defying expectations of a 700,000-barrel rise. Gasoline inventories were virtually unchanged at 211.3 million barrels despite stronger implied demand, while distillate fuel inventories, which include diesel and heating oil, rose by 1.1 million barrels.
That data reinforced expectations of tighter near-term supplies in the world's largest oil consumer. Yet Lin Ye, vice president of commodity markets, oil, at Rystad Energy, said the market is following a pattern in which geopolitical headlines trigger rapid price spikes, while those gains are often short-lived because supply flows and parallel diplomatic efforts tend to determine how long the upward moves persist.
Sources: Commodities & Futures News (Investing.com), Reuters
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