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Oil prices advanced sharply during Wednesday trading with Brent crude settling 3.8 percent higher at $82.15 a barrel while West Texas Intermediate gained 3.9 percent to close at $78.40, the Emirates News Agency reported. The move marked the largest one-day percentage increase in three weeks and reflected renewed concerns over potential supply disruptions in the Middle East alongside improving demand signals from China and the United States. Market participants cited preliminary readings from the Institute for Supply Management showing expansion in the U.S. manufacturing sector for the first time in seven months as a supporting factor for the rally.
The Emirates News Agency said the gains accelerated after data from the American Petroleum Institute indicated a larger-than-expected draw in U.S. crude inventories for the prior week. According to the API figures released late Tuesday, commercial crude stocks fell by 4.2 million barrels, exceeding analyst forecasts of a 1.5 million barrel decline. That report helped reinforce expectations that global stockpiles would tighten further if OPEC+ maintains its current production restraint policies through the remainder of the year.
Geopolitical risks added to the upward momentum as tensions in the Gulf region prompted traders to price in a potential disruption premium, the Emirates News Agency noted in its coverage. Shipping insurance rates for voyages through the Strait of Hormuz rose 12 percent in the past fortnight, according to data compiled by Lloyd’s List Intelligence, signaling heightened caution among energy transport operators. Such developments have historically correlated with short-term spikes in crude futures during periods of elevated uncertainty.
International Energy Agency assessments place global oil demand growth at 1.1 million barrels per day for the current calendar year, a pace that would absorb most of the spare capacity currently held by major producers. The Paris-based agency reported in its latest monthly oil market report that OECD commercial inventories stood at their lowest seasonal level since 2017, providing a tight fundamental backdrop for the Wednesday price surge. OPEC itself estimated in its August market outlook that call-on-crude from its members would average 27.3 million barrels per day in the fourth quarter, leaving limited room for unplanned outages.
Analysts at Goldman Sachs revised their fourth-quarter Brent price forecast upward by $3 to $85 a barrel following the Wednesday session, citing the combination of inventory draws and resilient economic activity in Asia. The bank noted in a research note distributed to clients that Asian refinery runs had recovered to 92 percent of capacity in recent weeks, supporting product demand and feeding back into crude purchases. Such revisions from major financial institutions often amplify moves already under way in futures markets.
Trading volumes on the New York Mercantile Exchange reached 1.4 million contracts for the front-month WTI contract, the highest level in six weeks and indicative of broad repositioning by hedge funds and commodity trading advisers. Commitments of Traders data from the U.S. Commodity Futures Trading Commission showed money managers had increased their net long position by 27,000 contracts in the week ending prior to the price jump, reversing a month-long decline. The positioning shift suggests professional investors are betting on further strength if no immediate resolution emerges to current supply risks.
