WTI crude oil futures rose above $71 per barrel on Wednesday, extending an over 2% gain from the previous session, driven by fears of a broader war in the Middle East following Iran’s missile launch targeting Israel. The direct involvement of Iran, a key OPEC member, increases the likelihood of disruptions to the oil supply. Israel reported that Iran launched over 180 ballistic missiles at the country on Tuesday in retaliation for Israel's military actions against Tehran's Hezbollah allies in Lebanon. In response, the Israeli military stated on Wednesday that its air force would intensify strikes across the Middle East and vowed retaliation against Iran. Meanwhile, API data showed that US crude oil inventories declined by 1.5 million barrels last week, falling short of market expectations of a 2.1 million-barrel draw, but marking a second consecutive weekly drop.
U.S. natural gas futures increased to $2.90 per MMBtu, the highest since late-July, driven by supply disruptions in the Gulf of Mexico caused by Hurricane Helene. The storm led to the shutdown of approximately 17% of gas production in the region, about 313 million cubic feet per day, which raised concerns about future supply capabilities. Additionally, widespread power outages left around 4.6 million homes and businesses in Florida, Georgia, and the Carolinas without electricity, further straining the region's power grid and affecting energy consumption. This disruption adds to existing challenges in the natural gas market, where injection levels into storage have been unusually low due to earlier price declines leading to reduced production. However, demand forecasts for the next two weeks were revised lower, partly due to reduced gas usage by power generators, as over 2 million homes and businesses in the Southeast and Midwest remain without power following the storm.
