Oil prices rise more than $2 on drop in US inventories

Oil prices rose more than $2 a barrel in early trading on Wednesday, driven by a decline in US crude inventories, recovering some of the losses from the previous session that resulted from a halt in fighting between Washington and Tehran. Brent crude futures rose $2.71, or 3.2%, to $86.80 a barrel, while US West Texas Intermediate crude rose $2.26, or 3.4%, to $81.95. Market sources said on Tuesday, citing American Petroleum Institute data, that US crude inventories fell by about 3.3 million barrels in the week ended July 24. Meanwhile, gasoline inventories rose by 918,000 barrels, while distillate inventories rose by 355,000 barrels. Official data from the Energy Information Administration is due on Wednesday. OPEC+ provided additional support to prices, as sources suggested the alliance would halt production increases for three months starting in October. Prices have been volatile due to the US-Israeli war on Iran, which disrupted oil flows, especially with the effective closure of the Strait of Hormuz. Prices fell about 5% on Tuesday amid hopes of resuming efforts to end the conflict. Trump said there were good talks with Iran, but threatened more strikes if negotiations collapse. However, Iran denied seeking to resume talks.