Oil prices rose on Wednesday, paring earlier losses after an incident involving a merchant ship near Oman. However, increasing cases of COVID-19 in China are hindering progress.
By 0854 GMT, WTI oil futures in the United States were up 35 cents, or 0.4%, to $87.27 per barrel. Meanwhile, Brent crude futures added 65 cents, or 0.7%, to reach $94.51 per barrel. Early in the day, both benchmarks decreased by more than $1. According to Commander Timothy Hawkins (NASDAQ: HWKN) of the United States Navy’s Fifth Fleet, an incident involving a commercial vessel occurred on Wednesday in the Gulf of Oman.
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According to the Associated Press, a tanker belonging to the Singapore company Eastern Pacific Shipping Company under the flag of Liberia was shot down by a drone. There was a temporary suspension of oil supplies to several regions of Europe via a portion of the Druzhba pipeline. So pipeline operators in Slovakia and Hungary said on Tuesday that oil prices had risen.
The interruption occurred at the same time as an explosion in eastern Poland, close to the Ukrainian border. It claimed two lives and increased the likelihood that the war between Russia and Ukraine may escalate. Stephen Innes, a managing partner at SPI Asset Management, noted that after the first knee-jerk surge in oil prices, the weak market follow-through underscores the substantial care that will be exercised to avoid an escalation.
Innes stated that U.S. Vice President Joe Biden’s assertion that the missile was probably not from Russia also eased immediate escalation concerns. Rising COVID-19 infections in China dampened spirits with this week’s loosening of virus restrictions.