Oil futures fell Wednesday after a sharp but brief spike in prices late Tuesday brought on by Iranian missile strikes at bases in Iraq where U.S. troops are stationed.<\/p>\n
Perceptions that the assault could mark the end of the U.S.-Iran conflict rather than an escalation, as well as data showing an unexpected weekly climb in U.S. crude stockpiles, combined to pull oil prices lower. <\/p>\n
West Texas Intermediate crude for February delivery
WTI jumped as high as $65.65 a barrel, its highest intraday mark since late April, while Brent soared to $71.75 a barrel, the highest in more than three months, immediately after Iran launched attacks on two bases used by the U.S. in Iraq. Iran described the attacks as revenge for a U.S. drone strike in Iraq last week that killed Qassem Soleimani, a top Iranian military commander and sparked vows by Tehran to retaliate. No casualties were reported as a result of Iran\u2019s strike on the U.S. bases. <\/p>\n \u201cThe extent of the retaliatory attacks looks to have been limited, though the market will be watching keenly today for hints as to whether or not President Trump will step into a further cycle of escalation,\u201d wrote analysts at JBC Energy, a Vienna-based consulting firm, in a note.<\/p>\n Trump late Tuesday treated that, \u201cAll is well\u201d and is scheduled to deliver remarks at 11 a.m. Eastern on Wednesday. <\/p>\n Iran\u2019s foreign minister Javid Zarif, said via Twitter that Iran didn\u2019t seek further escalation but would \u201cdefend ourselves against any aggression.\u201d Iranian Supreme Leader Ayatollah Ali Khameini, however, vowed further retaliation for the killing of Soleimani and said that Iran\u2019s goal was to expel U.S. forces from the region, the Wall Street Journal<\/a> reported.<\/p>\n \u201cIf Donald Trump suggests they will take immediate military action against Iran then oil prices could spike higher again, while a more conciliatory tone could be bad good news for risk assets and bad for oil,\u201d said Fawad Razaqzada, market analyst at Forex.com. \u201cSo, crude oil will remain in focus as investors react to any further escalation in the U.S.-Iran spat.\u201d<\/p>\n \u201cIn the short-term, the prospects of supply disruptions in the Middle East suggest prices could remain around current levels for a while,\u201d he said. \u201cBut soon or later investors will realize that the plentiful non-OPEC supply will more than make up for any short-term disruptions in the Middle East.\u201d<\/p>\n Data Wednesday from the Energy Information Administration showed that U.S. crude supplies edged up<\/a> by 1.2 million barrels for the week ended Jan. 3. That followed declines in each of the previous three weeks. Analysts polled by S&P Global Platts forecast a decrease of 3.7 million barrels, while the American Petroleum Institute on Tuesday<\/a> reported a 5.95 million-barrel decline, according to sources. <\/p>\n The EIA data showed supply increases of 9.1 million barrels for gasoline and 5.3 million barrels for distillates. The S&P Global Platts survey had shown expectations for a climb in supplies of 4.5 million barrels for gasoline and 5 million barrels for distillates. <\/p>\n \u201cA triumvirate of bearish builds in the weekly EIA reports are adding momentum to crude\u2019s overnight price reversal as fears of escalating tension are unwound,\u201d Matt Smith, director of commodity research, told MarketWatch.<\/p>\n \u201cCrude inventories have shown a surprise build, driven by the combo of a big drop in refinery runs, a rebound in imports and an easing in export volumes,\u201d he said. Refining activity has dropped back below 17 million barrels per day…and is now a whopping 669,000 bpd below year-ago levels.\u201d<\/p>\n \u201cNonetheless, both distillates and gasoline managed to muster large builds as demand remains both subdued and below year-ago levels on the four-week average,\u201d said Smith.<\/p>\n On Nymex, February gasoline
February natural gas
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\n CLG20, -4.07%<\/span><\/a><\/span>
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\n on the New York Mercantile Exchange fell $1.39, or 2.2%, to $61.31 a barrel on the New York Mercantile Exchange, while March Brent crude
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\n BRNH20, -3.47%<\/span><\/a><\/span>
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\n shed 62 cents, or 0.9%, to 67.65 a barrel on ICE Futures Europe.<\/p>\n
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\n RBG20, -3.37%<\/span><\/a><\/span>
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\n \u00a0fell 2.3% to $1.6828, while February heating oil
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\n HOG20, -3.11%<\/span><\/a><\/span>
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\n \u00a0lost 1.6% at $1.9992 a gallon. <\/p>\n
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\n NGG20, -1.39%<\/span><\/a><\/span>
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\n \u00a0fell 1.7% to $2.126 per million British thermal units ahead of Thursday\u2019s EIA update on supplies of the fuel, which is expected to show a weekly decline of 50 billion cubic feet, according to a survey of analysts by S&P Global Platts.<\/p>\n<\/p><\/div>\n
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