Oil climbed up to 3% as stalled Iran truce talks and surprise US crude draw reignite buying

Global crude oil futures rebounded on Wednesday as fresh Houthi strikes in Yemen, stalled Qatari peace mediation in Tehran, and an unexpected US crude inventory draw outweighed fresh Chinese fuel export quotas.

Crude benchmarks reversed Tuesday's losses as diplomatic optimism faded. Brent rose $1.44, or 1.26%, to settle at $115.32 a barrel, entering technically overbought territory for the fourth time in five sessions. WTI surged $2.88, or 2.88%, to close at $102.78, compressing the transatlantic spread inward to $12.54.

Escalating hostilities and diplomatic friction drove the rally. Houthi forces struck Yemen's Aden airport on Wednesday following Tuesday's missile claim against Saudi Arabia's 550,000-bpd Ras Tanura refinery, while a senior Iranian official dismissed a new Qatari draft peace proposal as "unacceptable ideas." BOK Financial noted traders are increasingly pricing in intensified US military strikes against Iran following the 3 November US midterms.

Tightening physical balances reinforced upward momentum after the Energy Information Administration reported a surprise 1.9-million-barrel US crude stockpile draw for the week ended 23 October, defying forecasts for a 15,000-barrel build. Bullish upstream fundamentals easily absorbed news of China issuing a rare fourth batch of 2026 fuel export quotas, expected steady December output targets at Sunday's OPEC+ meeting, and projected declines in November Russian seaborne crude exports.