Brent crude retreated toward $91 per barrel on Wednesday, erasing earlier gains despite escalating tensions in the Middle East that threatened to derail peace talks. Iran launched strikes against several Gulf states — including Bahrain, Jordan, and Kuwait — following US “self-defense” attacks carried out in response to the downing of an American helicopter.
Oil prices also came under pressure ahead of a closely watched US inflation release that could strengthen the case for a Federal Reserve interest rate increase later this year. Tighter monetary policy and higher borrowing costs are expected to eventually slow economic activity, darkening the outlook for global growth and energy consumption.
At the same time, industry data from the American Petroleum Institute indicated that US crude stockpiles fell by 9.1 million barrels last week to their lowest level in four months, as buyers moved to replace supplies disrupted by the instability in the Persian Gulf.
