Oil prices rose on Wednesday as fresh attacks on energy infrastructure in Russia and the Middle East threatened a recovery in supply. Brent gained 0.4 percent to close at $106.06 a barrel. West Texas Intermediate fell 0.3 percent to $94.77 a barrel, as of 07:13 Singapore time, by our market data.
Attacks on refineries and shipping
Russia accused Ukraine of attacking two Russian refineries, in breach of an energy ceasefire promoted by US President Donald Trump. Deputy Prime Minister Alexander Novak said the targeted refineries were in Saratov and Ryazan. The Ryazan refinery has a processing capacity of 400,000 barrels per day.
In the Strait of Hormuz, a cargo ship sank after being hit by an unidentified projectile. Iran-backed Houthis continued missile and drone attacks across Saudi Arabia.
A market already tight
Brent has risen more than 70 percent this year as the US-Iran war has shaken energy markets. Global inventories stand at 509 million barrels, below pre-conflict levels.
The International Energy Agency said onshore oil stocks were near at least a decade low. It warned that diesel and other fuel supply would remain under pressure next year.
Warnings from analysts
Bart Melek, head of global commodity strategy at TD Securities, said new attacks on oil infrastructure could push costs higher. “If new attacks on oil infrastructure in the Middle East further disrupt supply amid an already very tight physical market, energy costs and inflation will rise even higher,” he said.
Tankers carrying at least 37 million barrels stopped or diverted from the Middle East. There was no clear evidence yet that Gulf supply flows had declined.
Related: Brent crude rises 3.8% to $104 as Middle East tensions mount · Oil prices rise on US military operation reports amid Middle East tensions
Source: International Energy Agency
