Oil Prices surge as geopolitical tensions mount and U.S. crude inventories spike

Oil prices rebounded after a two-day slump, driven by mounting tensions in the Middle East, according to expert, Tom O'Donnell.

Meanwhile, U.S. crude inventories surged by their highest margin since April.

Brent crude hovered near $77 per barrel, while West Texas Intermediate edged closer to $74. The market remains on edge, with concerns that Israel may launch retaliatory strikes on Tehran, raising fears of a full-scale conflict in the region.

Iran, in response, has issued a stern warning, declaring its readiness to launch thousands of missiles if provoked.

These geopolitical tensions have rocked oil markets, sending volatility soaring as hedge funds ramped up their net long positions.

President Joe Biden intervened, urging Israel to steer clear of targeting Iran's oil infrastructure, and held his first conversation in over a month with Israeli Prime Minister Benjamin Netanyahu, emphasizing restraint.

Adding to the uncertainty, concerns over China’s economic outlook continue to weigh on the market. The absence of new stimulus measures from Beijing this week triggered a broad sell-off on Tuesday, including a sharp dip in oil prices.

In response, China's central government has scheduled a new fiscal policy announcement for Saturday.

In the U.S., oil markets faced further pressure as crude inventories swelled by 5.8 million barrels last week, the largest increase since late April, according to government data released on Wednesday.

Meanwhile, gasoline stockpiles saw a decline, intensifying the complexities in balancing supply and demand.

With heightened volatility, geopolitical uncertainty, and shifting supply dynamics, the oil market remains in a delicate and unpredictable state, leaving traders bracing for further developments.