LONDON: Oil prices rebounded on Wednesday as markets doubted whether the International Energy Agency's reported plan for a record release of oil reserves could offset potential supply shocks from the US-Israeli conflict with Iran.
Brent futures traded up $3.52, or 4%, at $102.05 a barrel by 09:22 GMT. US West Texas Intermediate (WTI) traded $3.69 higher, or 4.4%, at $89.56 a barrel.
Both contracts extended losses in early Asian trade, after plunging more than 11% on Tuesday, despite US crude prices leaping 5% at the market's opening.
The IEA's proposed drawdown would exceed the 182 million barrels of oil that IEA member countries put onto the market in two releases in 2022 when Russia launched its full-scale war in Ukraine, the WSJ said, citing officials familiar with the matter.
In a note to clients, Goldman Sachs analysts said that a stockpile release of that size would offset 12 days of the investment bank's estimated 15.4 million-barrel-per-day Gulf exports disruption.
"[It] doesn't look like the oil market thinks that the "largest ever" release of strategic reserves will help much against current crisis", SEB analyst Bjarne Schieldrop said.
The US and Israel pounded Iran on Tuesday with what the Pentagon and Iranians on the ground called the most intense air strikes of the war.
The US military also "eliminated" 16 Iranian mine-laying vessels near the Strait of Hormuz on Tuesday, the US Central Command said, as US President Donald Trump warned any mines laid in the Strait by Iran must be removed immediately. — Reuters
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