Oil prices rose Thursday, driven by persistent concerns about supply from the Middle East amid escalating attacks on shipping in the Gulf and the Strait of Hormuz.
Brent crude futures gained $1.33, or 1.33%, to reach $101.53 a barrel by 0116 GMT. U.S. West Texas Intermediate crude futures rose $1.11, or 1.26%, to $89.39.
Prices had settled lower Wednesday after the International Energy Agency agreed to accelerate the release of oil stocks and prioritize diesel supplies under a plan launched in March, as governments seek to address record fuel prices and supply disruptions caused by the Iran war.
Threats to oil shipping in the Gulf and the Strait of Hormuz — which carried shipments equal to about 20% of global oil and fuel before the war — have increased in October as the U.S.-Israeli conflict with Iran enters its eighth month.
Attacks on tankers sailing through the Strait of Hormuz last week hit their highest level of any week since the Iran war began, as Gulf producers increase exports. The surge in attacks comes as more crude flows out of the Gulf but at higher costs and greater risk to cargoes and crew.
In the latest attack, a tanker north of Qatar was struck by multiple projectiles, causing casualties, the United Kingdom Maritime Trade Operations agency said Wednesday.
"In the past, such attacks have resulted in a reduction in shipments from the Persian Gulf. This time around, producers appear to be willing to take the risk of their vessels being damaged, as there is no alternative way to get their oil to international markets," Daniel Hynes, senior commodity strategist at ANZ bank, said in a note Thursday.
Hynes said the IEA's oil release would likely consist of barrels already part of the group's original 400-million-barrel release plan at the start of the Middle East conflict, meaning it does not appear to represent an additional draw on strategic inventories.
"Ultimately, strategic stock releases can augment supply flows temporarily but do not create new production capacity," he said.
Inventory data from the U.S., the world's biggest oil consumer and producer, supported prices as crude stockpiles fell by more than expected while diesel inventories declined slightly.
Crude inventories fell by 3.2 million barrels to 424.1 million barrels in the week ended Oct. 2, the Energy Information Administration said Wednesday, compared with analysts' expectations in a Reuters poll for a 1.7 million-barrel decline.
Distillate fuel inventories, including diesel and jet fuel, dropped by 42,000 barrels to 105.14 million barrels, well below levels reported for this time of year in the past five years.
