Brent crude rebounded on Thursday as new attacks on tankers fed worries about oil supplies. The move reversed a drop of more than 8% for both oil benchmarks on Wednesday.
Brent futures settled more than $3 a barrel higher on Thursday as new attacks on tankers fed worries about oil supplies. Investors also reassessed the outlook for the US-Israeli war with Iran.
The benchmark finished up $3.67, or 3.88%, at $98.29 a barrel. US West Texas Intermediate crude closed $2.40, or 2.72% higher, at $90.52 a barrel. On Wednesday, both benchmarks had tumbled more than 8% to their lowest settlement levels since August 31.
Tanker attacks keep the market on edge
Andy Lipow, president of Lipow Oil Associates, said reports of tankers striking mines in the Middle East or being targeted by drones continue to worry the oil market. Investors are also worried about Iran's unchanged position on negotiations with the US.
Attacks on tankers in the Gulf are still running close to a record pace, with at least five vessels reporting incidents since Sunday, according to UK maritime security agency UKMTO. The agency said 35 vessels were hit in October, the most in any month of the war.
Gelber and Associates wrote in a note on Thursday: "Today’s rebound reflects caution about pricing in a rapid normalization of oil flows", ahead of diplomatic progress translating into dependable shipping.
Eurasia Group lowers odds of renewed US strikes
Eurasia Group lowered its estimate for the chance of renewed US strikes on Iran to 60% from 65%. It also cut the probability of a deal to 10% from 20% and raised the likelihood of a continued standoff to 30% from 15%.
Despite the recent drop in oil prices, any escalation could push Brent into a $110 to $125 per barrel range, Eurasia Group said. Citi said in a note there were concerns that with the midterms over, the White House could focus on its executive powers in foreign policy and potentially escalate the war.
Elsewhere, Ukraine renewed attacks on Russian oil refineries, raising concerns about Russia's ability to export diesel under a deal with Trump. The Ryazan refinery, one of Russia's largest, appeared to have been targeted in a large overnight drone attack, according to a Reuters video analysis.
Source: Reuters via Investing.com
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