Oil rises as doubts over US-Iran deal heighten supply concerns

Oil prices climbed on Wednesday amid doubts surrounding a U.S.-Iran peace agreement and strikes on two vessels, raising concerns over disruptions to Middle East supplies, according to wire material. Despite industry data indicating a surge in U.S. crude inventories, Brent futures rose 75 cents, or 0.84 percent, to $89.66 a barrel, while US West Texas Intermediate (WTI) crude increased 72 cents, or 0.87 percent, to $83.92.

Both contracts had jumped more than $1 earlier in the day. This came after Tuesday's rises of over $1 for both highest closes since July 31, as hopes for a peace deal between the United States and Iran faded following President Trump's new demand for Iran to compensate victims of wars, attacks, and protests. The Middle East has become a volatile battleground between peace and war, causing oil prices to fluctuate between $70 and $90 a barrel, as noted by Priyanka Sachdeva, head of market insights for Phillip Nova in Singapore.

Iran's top security official, Mohsen Rezaei, threatened to keep the Strait of Hormuz closed unless the U.S. accepted Iran's conditions for ending the war, including the release of frozen assets and an end to regional conflicts. U.S. President Trump suggested that Iran could either "bop along" or "hit them really, really hard" in a Tuesday interview.

The uncertainty created a volatile yet profitable landscape for traders and speculators. While shipping data showed a one-week low of eight vessels transiting the Strait of Hormuz, US crude oil and fuel inventories were expected to decrease last week, according to a Reuters poll. However, market sources citing American Petroleum Institute data reported a sharp rise in US crude inventories and a decline in gasoline and distillate stocks. If confirmed by the EIA report, the crude build could alleviate concerns about supply tightness.