Oil prices jumped more than 1% on Wednesday after reports Israel is preparing a strike on Iranian nuclear facilities, raising fears that a conflict could upset supply availability in the key Middle East producing region.
Brent futures for July rose 86 cents, or 1.32%, to $66.24 a barrel by 0003 GMT. U.S. West Texas Intermediate crude futures for July climbed 90 cents or 1.45% to $62.93.
New intelligence obtained by the United States suggests that Israel is preparing to strike Iranian nuclear facilities, CNN reported on Tuesday, citing multiple U.S. officials familiar with the matter.
It was not clear whether Israeli leaders have made a final decision, CNN added, citing the officials.
U.S. crude futures rose by more than $2 a barrel on the news while Brent futures rose more than $1.
Iran is the third-largest producer among the members of the Organization of the Petroleum Exporting Countries and an Israeli attack could upset flows from the country. There are also concerns Iran could retaliate by blocking oil tanker flows through the Strait of Hormuz chokepoint in the Gulf, through which Saudi Arabia, Kuwait, Iraq and the United Arab Emirates export crude oil and fuel.
Still, there were some signs of improving crude supply.
U.S. crude oil stocks rose last week while gasoline and distillate inventories fell, market sources said, citing American Petroleum Institute figures on Tuesday.
Crude stocks in the U.S., the world's biggest oil consumer, rose by 2.5 million barrels in the week ended May 16, the sources said on condition of anonymity.
Investors are also looking ahead to government U.S. oil stock data from the Energy Information Administration later on Wednesday.
Also, Kazakhstan's oil production has risen by 2% in May, an industry source said on Tuesday, an increase that defies pressure from OPEC+ on the country to reduce its output.
Source Name : Economic Times