Brent crude jumped 3.9% to $104.07 a barrel and WTI rose 3.7% to $91.53 after Iran stepped up attacks on tankers in the Strait of Hormuz and a storm bore down on US Gulf Coast oil production. Shipping through Hormuz fell to an over two-month low, while Tropical Storm Isaias forced evacuations at offshore platforms. Markets are also weighing reports that the Pentagon is preparing options for renewed strikes on Iran.
Brent crude jumped 3.9% to $104.07 a barrel on Thursday, as Iran escalated attacks on tankers in the Strait of Hormuz and a storm closed in on US Gulf Coast crude oil production. West Texas Intermediate crude for November delivery climbed 3.7% to $91.53 a barrel over the same window.
Vessel transits through the strait slid to an over two-month low, Reuters reported, citing shipping data from analytics firm Kpler. Iranian attacks on tankers hit their highest weekly level since the U.S.-Iran war began, coming shortly after Hormuz traffic had briefly returned to pre-war levels in September.
Attacks on shipping escalate
The UK Maritime Trade Operations body said a tanker was struck by multiple projectiles north of Qatar on Wednesday, with casualties reported from the incident. According to media reports, the Pentagon has instructed US Central Command to prepare for a possible resumption of major combat operations against Iran, though President Trump has yet to decide on the timing of any strikes. Maersk said it will raise its emergency fuel surcharge to 20% from next Monday in response to the Middle East war.
Gulf Coast braces for Storm Isaias
Tropical Storm Isaias is set to strengthen into a hurricane and make landfall on the northern Gulf coast by the weekend, the National Weather Service said, with early Thursday reports indicating it had already reached hurricane strength. Several oil and gas companies were seen evacuating non-essential personnel from offshore facilities, with BP, Chevron and Shell facing the most exposure to lost output. Shell and Chevron said they were shutting down production. A model cited by Reuters estimated that up to 11.2 million barrels of production could be lost across the Gulf over the storm's duration.
Inventories fall as reserve release looms
US crude oil inventories fell by 3.2 million barrels in the week to October 2, missing expectations for an increase. Oil pared some of Wednesday's gains after the International Energy Agency said completing a previously announced release of 400 million barrels from strategic reserves as soon as possible would bring about 100 million barrels to market, though it remained unclear whether an additional release was planned. Deutsche Bank analysts suggested there were still few signs that energy-driven inflation pressure was easing.
Natural gas felt the same squeeze. European prices rose almost 3% to €80.39 per megawatt hour, their highest level in more than two weeks. The UK's front-month contract climbed 3.1% to 199.69p per therm.
The pan-European Stoxx 600 fell almost 1% to its lowest level in almost four months. The 10-year US Treasury yield rose five basis points to 5.331% as investors priced in the inflation risk from higher energy costs.
Sources: Commodities & Futures News, Business | The Guardian
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