At 11:09 GMT, Light Crude Oil Futures are trading $63.25, up $0.62 or +0.99%.
Middle East and Ukraine Conflict Drive Short-Term Bid in Oil
Crude prices were lifted early Wednesday after Israel reportedly targeted Hamas leadership in Qatar. The attack initially sent oil benchmarks up nearly 2% before gains cooled. Separately, geopolitical risk escalated further as Poland intercepted drones during a Russian assault in Ukraine—marking the first time a NATO country engaged directly. While tensions are elevated, traders noted the absence of any immediate supply disruptions.
Despite the headlines, the rally failed to gain momentum. Analysts at SEB warned that “the dark cloud of surplus ahead” continues to pressure the market, highlighting Brent’s $2 drop from last Tuesday as evidence that geopolitical risk premiums are short-lived without a direct threat to supply.
U.S. Tariff Threats and Fed Policy in Focus
Adding to the political backdrop, former U.S. President Donald Trump has reportedly urged the EU to impose 100% tariffs on Chinese and Indian imports. Both countries are major buyers of Russian oil, and any disruption to their access could have knock-on effects across global oil flows. However, aggressive sanctions risk clashing with inflation concerns and may complicate the Federal Reserve’s rate decision.
Traders continue to anticipate a Fed rate cut at the September 16-17 meeting—a move that would likely stimulate economic activity and oil demand. But until that cut materializes, uncertainty around monetary policy remains a headwind.
EIA Stock Data and OPEC+ Output Cap Further Gains
Supply-side concerns continue to dominate trader sentiment. Preliminary data from the American Petroleum Institute (API) showed a build in U.S. crude, gasoline, and distillate inventories last week.
