Shafaq News/ Oil pricesjumped by over a dollar on Wednesday due to rising concerns Middle Easttensions could escalate, potentially disrupting crude output from the region,following Iran's biggest ever military blow against Israel.
Brent futures leapt $1,or 1.36%, to $74.56 a barrel, while U.S. West Texas Intermediate (WTI) crudespiked $1.07, or 1.53%, to $70.9 at 0330 GMT.
During trading onTuesday, both crude benchmarks surged more than 5%.
Oil markets were largelyfocusing on the narrative of a weakening global economic outlook denting demandfor fuel, said Priyanka Sachdeva, senior market analyst at Phillip Nova.
"Still, the scalequickly turned towards fears of oil supply disruptions in the Middle East afterIran fired ballistic missiles at Israel," Sachdeva said.
Iran said early onWednesday that its missile attack on Israel was over barring furtherprovocation, while Israel and the U.S. promised to retaliate against Tehran asfears of a wider war intensified.
Tehran said any Israeliresponse to the attack, which Israel said involved more than 180 ballisticmissiles, would be met with "vast destruction".
The United NationsSecurity Council scheduled a meeting about the Middle East for Wednesday, andthe European Union called for an immediate ceasefire.
The direct involvement ofIran, an OPEC member, raises the prospect of disruptions to oil supplies, ANZanalysts said in a note, adding that the country's oil output rose to asix-year high of 3.7 million barrels per day in August.
Spain's energy crisis hasseen both gas and electricity prices soar,
"A major escalationby Iran risks bringing the U.S. into the war," Capital Economics said in anote. "Iran accounts for about 4% of global oil output, but an importantconsideration will be whether Saudi Arabia increases production if Iraniansupplies were disrupted."
A panel of ministers fromthe Organization of the Petroleum Exporting Countries and allies, togethercalled OPEC+, meets later on Wednesday to review the market, with no policychanges expected. From December, OPEC+, which includes Russia, is set to raiseoutput by 180,000 barrels per day (bpd) monthly.
"Any suggestion thatproduction hikes will proceed could offset concerns of supply disruptions inthe Middle East," ANZ's note said.
U.S. stockpile data wasmixed: crude oil and distillate inventories fell last week while gasolineinventories rose, market sources said, citing American Petroleum Institutefigures on Tuesday.
Oil investors will alsobe closely watching Friday's U.S. jobless claims data as it is expected toinfluence projections of the Federal Reserve's monetary easing, which may aidlong-term oil demand by stimulating overall economic activity, Phillip Nova'sSachdeva said.
(Reuters)