WTI Holds Gains Despite Surprise Crude Build (Biggest Since June)

Oil prices continue to rise due to geopolitical tensions, supported by an API-reported crude draw and OPEC+ headlines denying plans to increase production aggressively. Iran's involvement in a shooting war with its neighbors has led to concerns about potential disruptions to oil production and transit. Analysts believe that the conflict needs to spread to the Gulf to ignite a broader and sustained oil price rally. The API reported a crude draw of 1.46 million barrels, while the DOE reported a surprise build of 3.9 million barrels, driven by anticipation of Hurricane Helene's impacts. Refinery utilization rates in the Midwest slumped to 85%, the lowest since April, due to maintenance at BP Whiting. Gasoline demand plunged to a four-year seasonal low following a fifth straight decline last week. The Biden administration added 660,000 barrels to the Strategic Petroleum Reserve, contributing to the largest increase since June. US crude production remains near record highs, but oil prices are holding their gains despite the crude build. Analysts are watching for potential retaliation by Israel against Iranian military and economic assets, including energy infrastructure. The rising oil prices are a concern for President Biden and Federal Reserve Chairman Jay Powell, who recently cut interest rates by 50 basis points.