Crude oil prices were on course to book a sharp weekly gain, with Brent crude on track for gains of about $6 per barrel and WTI registering a much more modest tick higher, from around $99 per barrel on Monday to over $100 earlier today.
At the time of writing, Brent crude was trading at $114.00 per barrel, and West Texas Intermediate was changing hands for $100.40 per barrel, as hostilities in the Middle East remain front-page news for oil traders. The focus, however, seems to be on Houthi attacks on Saudi infrastructure, including Aramco facilities.
The latest news from that front was Aramco’s order for personnel evacuation from its headquarters in Dhahran, which is in the Persian Gulf, suggesting the Yemeni Houthis have some longer-distance capabilities than what they used previously, when they focused on attacks in the Red Sea and Saudi Arabia’s Red Sea ports.
Meanwhile, adding fuel to the oil price rally, Libya’s National Oil Corporation reported the shutdown of an oil pipeline that feeds oil from two fields to the Zawya export terminal. The shutdown prompted cuts in production at the two fields.
“Markets are increasingly worried about renewed escalation in the Persian Gulf, a scenario that could threaten oil flows that have so far remained remarkably resilient,” ING’s commodity strategy team wrote in a note today. “Reports suggest President Trump is considering fresh strikes on Iran, while the US is reinforcing its military presence in the region with the deployment of a second aircraft carrier,” Warren Patterson and Ewa Manthey also wrote.
The analysts added that the threat of renewed escalation between the United States and Iran undermined hopes of the opposite following the U.S. midterm elections next month. As a result, the bank’s analysts revised their Brent crude price outlook for the fourth quarter, saying the previously estimated $80 average per barrel looked “unattainable”.
By Irina Slav for Oilprice.com
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