TOKYO: Oil prices climbed on Wednesday as traders weighed supply risk from fighting between Yemen’s Houthis and Saudi Arabia against the prospect of increased diesel from Russia.
Brent crude futures rose 89 cents, or 0.8%, to $106.58 a barrel by 0030 GMT, while US West Texas Intermediate crude futures gained 80 cents, or 0.9%, to $94.94. Brent fell 0.9% on Tuesday, while WTI rose 0.4%.
“Supply concern stemming from conflict between the Houthis and Saudi Arabia is driving prices higher,” said chief strategist Hiroyuki Kikukawa at Nissan Securities Investment, a unit of Nissan Securities.
“However, the expectation that increased Russian diesel exports will ease market tightness is likely to limit sharp price movement in either direction,” Kikukawa said, projecting WTI to trade between $90 to $100 a barrel.
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The Houthis attacked an administrative building belonging to state-owned oil firm Saudi Aramco in the city of Dhahran, causing a limited fire, Saudi Arabia’s energy ministry said on Wednesday.
The group has fired ballistic missiles and drones at Saudi Arabia over the past week in retaliation for the kingdom’s support of Yemeni government forces. Riyadh’s international airport has been hit four times, with a strike on Saturday killing 13 people.
Last month, Saudi Arabia raised oil production despite disruption to shipments caused by the US-Iran war, leading to a sharp production increase from OPEC+ — the Organization of the Petroleum Exporting Countries and partners including as Russia — OPEC said on Tuesday.
Iran is deploying new tactics to target ships in the Strait of Hormuz to keep oil prices high and influence US midterm elections, two senior Iranian officials told Reuters.
In Russia, the government said on Tuesday it did not see any direct link between peace talks with Ukraine and its deal to export diesel to the US.
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The comment came after Reuters reported that US envoys had told Ukrainian officials on Friday that the deal was part of an attempt to draw Russia back to negotiations for a peace settlement.