FX.co ★ Crude Oil Extends Gains to Over 3%

Crude oil prices climbed more than 3% on Wednesday, rising above $103 a barrel, as intensifying tensions in the Middle East fueled worries over potential supply disruptions. Yemen’s Iran-aligned Houthi movement attacked Aden airport and claimed responsibility for a missile strike on Saudi Arabia’s largest oil refinery, which has a processing capacity of 550,000 barrels per day, though Saudi authorities had not confirmed the refinery attack. At the same time, concerns grew that the US might resume military operations against Iran after the November 3 midterm elections, a move that could exacerbate regional instability and put additional pressure on oil flows.

Diplomatic efforts showed little progress. Qatari mediators submitted a new draft proposal to Tehran aimed at ending the conflict involving the US and Israel, but an Iranian official rejected the plan as unacceptable, leaving the outlook for a negotiated settlement unclear. Adding further support to prices, US crude inventories fell by 1.9 million barrels in the week ended October 23, a drawdown largely in line with industry expectations.