Brent and WTI crude jumped about 4% on Thursday after Yemen's Iran-backed Houthis fired missiles at Saudi Arabia, which intercepted six of them near Yanbu and Taif. The rally came as US-Iran diplomacy showed little progress, Iranian flights to Gulf hubs were canceled under new US sanctions, and traders weighed a reported US plan to ban diesel exports.
Oil prices jumped about 4% on Thursday, after Yemen's Iran-backed Houthis fired missiles at Saudi Arabia and US-Iran diplomatic talks showed little sign of progress. Brent crude climbed $4.10, or 4.0%, to $107.18 a barrel. West Texas Intermediate rose $3.66, or 4.0%, to $95.82.
Saudi air defenses intercept six missiles
The Saudi-led coalition in Yemen said its forces intercepted six ballistic missiles fired by the Houthis on Thursday, thwarting attacks on the southern province of Taif and the Red Sea port area of Yanbu. Brent had already climbed about 8% over the previous two days, putting it on track for its highest close since September 15. WTI, meanwhile, was set to rise for the first time in seven days after falling about 13% over the prior six sessions.
Iran-US standoff deepens
Diplomatic contact between Washington and Tehran showed little progress this week. Flights from Iran to Gulf neighbors, including Dubai, appeared to be canceled Thursday after a US deadline passed requiring global firms to halt work with Iranian airlines, part of a shift toward targeting third-country firms that do business with Iran. Iran threatened Wednesday to retaliate against any neighboring country that complies with the ban by disabling its airports.
At the United Nations General Assembly, Iranian President Masoud Pezeshkian blamed Washington and Israel for regional instability. According to CNBC: "The United States president described us as terrorists. We have been the victims of terrorism." He also vowed that Tehran would keep resisting to the end.
Diesel export ban fears add pressure
With diesel prices at record highs, the EU and US are in high-level talks over a reported US plan to ban diesel exports. Politico reported the plan as a 90-day ban being prepared ahead of the November midterm elections, though Energy Secretary Chris Wright has disputed that report. US diesel futures traded up more than 5% Thursday morning in the crude oil-linked products complex. The premium of Brent over WTI rose to its highest since May for a second straight day. Weekly US crude oil exports still fell to 3.3 million barrels per day for the week ended September 18, down from a record 6.4 million bpd in April, according to US Energy Information Administration data.
Asia's crude appetite grows
Asia's oil imports rose in September to their highest level since the start of the Iran war. The region is on track to bring in 23.96 million barrels per day, up from 23.38 million bpd in August — the most since February, according to Kpler data cited by Reuters.
Sources: Commodities & Futures News, International: Top News And Analysis
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