Oil prices rose on Wednesday after Yemen's Iran-aligned Houthis said they had hit Saudi Arabia's biggest oil refinery with a missile, renewing concerns about supply from the Middle East. Brent crude futures rose $1.48, or 1.3%, to $115.36 a barrel as of 0140 GMT, while US West Texas Intermediate crude added $1.22, or 1.22%, to $101.12. Saudi authorities did not immediately confirm the strike on the 550,000-barrel-per-day facility, and the Houthi claim itself remains unverified by Riyadh.

A reversal after Tuesday's fall

The rise reversed part of a fall of nearly $2 on Tuesday, when talks in the Middle East helped ease supply worries for a time. Iranian Security Council chief Mohsen Rezaei met Supreme Leader Ayatollah Mojtaba Khamenei on Tuesday, a day after talks with representatives of Saudi Arabia, Turkey and Pakistan, and the four countries agreed to continue talks on peace and security. Scope for peace has been dented by renewed Houthi attacks on Saudi Arabia, and analysts quoted by Reuters said continued attacks and the expanding military presence in the Gulf are keeping supply risks in place even as diplomatic headlines encourage some of the recent premium to unwind.

What traders are watching next

US crude stockpiles are expected to have risen by about 15,000 barrels in the week ended 23 October, according to a poll of eight analysts by Reuters. The OPEC+ producers are expected to keep their December output targets steady when they meet on Sunday, although production in most of the seven core members — Saudi Arabia, Russia, Iraq, Kuwait, Algeria, Kazakhstan and Oman — is below their targets. Swiss bank UBS expects Brent to stay elevated near $110 a barrel through to the end of the year, citing volatile Middle East supply and geopolitical uncertainty. Source: Reuters.