2023.10.1809:59:00UTC+00Oil Prices Jump As Supply Fears Mount

Oil prices jumped over 3 percent on Wednesday after a huge explosion at a Gaza hospital derailed the diplomatic efforts led by the U.S. to mobilize support for "Israel's right to defend itself".

Benchmark Brent crude futures jumped 3.2 percent to $92.75 a barrel on renewed supply fears, while WTI crude futures were up 3.3 percent at $88.28.

While the attack drew condemnation from Arab governments, Israel blamed a failed missile from militant group Palestinian Islamic Jihad for the blast, which killed about 500 people.

The escalation of violence along Israel's border with Lebanon has also raised concerns of a wider regional conflict that diplomats are trying to prevent.

Oil prices were also buoyed by improved economic readings from China and industry data showing across the board draws in crude and product inventories.

Official data showed China's GDP grew at a 4.9 percent annual pace in July-September, down from 6.3 percent in the previous quarter but above forecasts for a 4.4 percent increase.

Retail sales and industrial output figures for September also surprised on the upside, suggesting that Beijing's stimulus measures to prop up banking and property sectors are gaining traction.

Meanwhile, the American Petroleum Institute reported that U.S. crude stocks fell by about 4.4 million barrels in the week ended Oct. 13, in another sign of tight supplies.

Gasoline inventories dropped by 1.6 million barrels, while distillate inventories fell by about 610,000 barrels.