Oil rallied as a deadly explosion at a Gaza hospital boosted tensions in the Middle East before President Joe Biden’s arrival in the region.
West Texas Intermediate jumped above $88 a barrel, after settling flat on Tuesday. After the blast, leaders of Jordan, Egypt and the Palestinian Authority canceled a planned summit with Biden, complicating the US president’s push to ensure the Israel-Hamas conflict doesn’t widen across the Middle East.
The global oil market has been rocked by the regional crisis, which was ignited by Hamas’ Oct. 7 attack on Israel. Traders are on alert in case the fighting spreads beyond Gaza, potentially embroiling Iran, which supports Hamas. A wider conflict could endanger crude flows, further tightening what was an already-stretched oil market following months of OPEC+ supply cuts.
The Hamas-controlled Gaza authorities said that the hospital blast was caused by an Israeli airstrike, killing hundreds of people. Israel, meanwhile, pointed the finger at a failed missile from militant group Palestinian Islamic Jihad. The Pentagon said it didn’t have information on who was responsible.
Beyond the Middle East, oil stockpiles will be in focus. In the US, the American Petroleum Institute said inventories at the Cushing, Oklahoma, storage hub shrank by more than 1 million barrels, according to Oilprice.com. If confirmed by official data later Wednesday, that would cut them to the lowest since 2014.
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