By Adedapo Adesanya
Brent climbed by 1.8 per cent or $1.60 to a two-week high of $91.50 per barrel on Wednesday on a bigger-than-expected US stockpile draw and concerns about global supplies after Iran called for an oil embargo on Israel over the conflict in Gaza.
Also, the West Texas Intermediate (WTI) crude rose by 1.9 per cent or $1.66 to settle at $88.32 per barrel as the US Energy Information Administration (EIA) said energy firms pulled 4.5 million barrels of crude from stockpiles during the week ended October 13.
On Tuesday, the American Petroleum Institute (API) industry group reported a 4.4 million barrel drop.
It was the fourth crude storage decline in five weeks. It far exceeded the 1.7 million barrel weekly draw a year earlier compared with a five-year (2018-2022) average build of 2.5 million barrels.
Iranian Foreign Minister Hossein Amirabdollahian urged an oil embargo on Israel after hundreds of Palestinians were killed in a blast at a Gaza City hospital.
The Iranian foreign minister called on members of the Organisation of Islamic Cooperation (OIC) to impose an oil embargo and other sanctions on Israel.
Tensions also grew after Jordan cancelled a summit it was to host with US President Joe Biden and Egyptian and Palestinian leaders.
Mr Biden arrived in Israel on Wednesday pledging solidarity with Israel in its war against Hamas and backing Israel’s account that militants caused the hospital blast.
However, the Organisation of the Petroleum Exporting Countries (OPEC) said it is not planning to take any immediate action on OPEC member Iran’s call.
The Gulf Cooperation Council (GCC) also said that it was committed to energy security and that oil shouldn’t be used as a weapon compared to 1973.
Arab producers led by Saudi Arabia fifty years ago slapped an oil embargo on Western supporters of Israel in its war with Egypt, targeting Canada, Japan, the Netherlands, Britain and the United States.
Oil prices spiked as a result but over the longer term, the crisis led to the development of new oil provinces outside the Middle East like the North Sea and deepwater assets, and encouraged alternative energy.
Oil prices also drew support from data showing strong economic growth in China, the world’s biggest oil importer, in the third quarter.
The country’s gross domestic product (GDP) grew 4.9 per cent from July to September from the year earlier, data released by the National Bureau of Statistics showed, but slower than the 6.3 per cent expansion in the second quarter.
In the US, the world’s biggest oil consumer, higher-than-expected September retail sales spurred expectations of another interest rate hike by year-end. Interest rate hikes to curb inflation can slow economic growth and reduce oil demand.
Dipo Olowookere