Oil Prices Soar on Shrinking US Crude Inventories and OPEC+ Support

Oil prices surged by more than $2 a barrel in early trade on Wednesday due to shrinking US crude inventories and prospects of tightened supplies. Brent futures increased by $2.71, or 3.2%, to $86.80 a barrel at 0002 GMT, while U.S. West Texas Intermediate (WTI) crude rose $2.26, or 3.4%, to $81.95.

The sharp decline in US crude inventories by about 3.3 million barrels in the week ended July 24 boosted oil prices. This move is expected to have a significant impact on the market as it signals a tightening of supplies. OPEC+ is also likely to suspend production increases for three months starting October, further supporting oil prices.

The US-Iran conflict has disrupted global flows of crude oil, particularly with the closure of the Strait of Hormuz. However, Oman's proposal to manage the strait via voluntary fees has regional backing and may ease shipping disruptions.