Oil prices rose on Wednesday after data showed a bigger-than-expected drop in US crude inventories, with rising tensions in the Middle East providing support.
Brent crude futures rose 47 cents, or 0.5%, to $86.71 a barrel by 0330 GMT, hitting a 10-week peak. WTI Crude futures rose 43 cents, or 0.5%, to $83.24 a barrel, but are still far from a two-month peak reached earlier this week.
Both indexes closed lower on Tuesday as fears that Hurricane Beryl will disrupt production in the Gulf of Mexico eased.
However, a significant drop in US crude inventories is providing some support for prices as tensions in the Middle East persist.
U.S. crude oil inventories fell by 9.163 million barrels in the week ended June 28, according to figures from the American Petroleum Institute (API) on Tuesday. But gasoline inventories rose by 2.468 million barrels and distillates fell by 740,000 barrels.
Analysts had expected a 700,000-barrel drop in crude oil inventories, a 1.3 million-barrel drop in gasoline inventories and a 1.2 million-barrel drop in distillates inventories.
Oil prices were supported by a decline in U.S. crude oil inventories, but gains were limited as some investors sought to profit from the recent rally to reach the highest levels since April.
The U.S. Energy Information Administration (EIA) will release its weekly data on Wednesday at 1430 GMT.
Meanwhile, gasoline demand in the U.S. is expected to rise as the summer travel season kicks off this week with the Independence Day holiday. The American Automobile Association predicts that holiday travel will be 5.2% higher than in 2023, and car travel will increase by 4.8%.
In the Middle East, Israeli forces bombed several areas of the southern Gaza Strip on Tuesday. The Israeli military and Hezbollah are also fighting on the southern border with Lebanon. The risk of an Israeli-Hezbollah war, combined with the risk of a widening conflict in the Middle East, poses upside risks to the near-term outlook.
Meanwhile, oil production from the Organization of the Petroleum Exporting Countries (OPEC) rose for the second month in a row in June, as higher supplies from Nigeria and Iran offset the impact of voluntary supply cuts from other members and the broader OPEC+ alliance.
