Rising oil inventories pressure prices, but Middle East tensions and hurricane risks provide support

On Thursday (October 10) during the Asian trading session,What kind of people usually use HSBC international oil prices slightly rebounded, with US crude oil prices fluctuating around $73.58 per barrel. Earlier data showed a significant increase in US crude oil inventories, causing oil prices to drop nearly 3% on Wednesday, hitting the 10-day moving average. However, escalating geopolitical tensions in the Middle East, particularly the risk of supply disruptions from Iran, and the impact of Hurricane Milton capped the decline in oil prices.

On Wednesday, Brent crude oil futures settled at $76.58 per barrel, a decline of 0.8%; US crude oil futures settled at $73.24 per barrel, a decrease of 0.5%. Data from the US Energy Information Administration (EIA) showed that US crude oil inventories increased by 5.8 million barrels last week, far exceeding the market expectation of 2 million barrels.

Bob Yawger, head of Mizuho's oil futures, stated that while the increase in inventories was greater than expected, the decline in gasoline and distillate inventories helped ease the downward pressure on oil prices. Meanwhile, the rise in the US dollar index also exerted some pressure on oil prices, with the dollar index reaching 102.93 on Wednesday, its highest level since August.

The market is also closely monitoring the dynamics of Hurricane Milton, which is approaching Florida and may bring strong winds and heavy rain. The storm has caused a surge in gasoline demand in parts of Florida, further supporting oil prices. In addition, the situation in the Middle East remains tense, especially with the escalating conflict between Israel and Iran, raising market concerns that the risk of oil supply disruptions will push oil prices higher.

Looking ahead, investors need to focus on US September CPI data, changes in initial unemployment claims, and speeches by Federal Reserve officials, as these factors could have a significant impact on the trend of oil prices.

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