Crude oil prices were set for another weekly gain today, also extending their monthly rise to four months in a row amid continued fears of escalation in the Middle East and Houthi attacks on Saudi infrastructure.
At the time of writing, Brent crude was trading at $116.56 per barrel, with West Texas Intermediate at $103.35 per barrel ahead of the November 3rd U.S. midterm elections. President Trump has suggested repeatedly that the U.S. could resume strikes against Iran after the elections. Media have reported the U.S. and Israel are coordinating on those strikes, further fueling expectations of a return to hostilities.
According to Reuters, Brent crude has booked gains of 11% this month alone, with WTI adding even more, at 14%. Since the end of June, Brent has gained over $40 per barrel, and WTI has gone up by some $34 per barrel.
Meanwhile, reports of attacks on tankers in the Strait of Hormuz continue at a steady pace, contributing to the bullish sentiment on oil markets. A fresh report about Houthi attacks on Saudi oil facilities has also reinforced that sentiment.
“Continued kinetic action around the Strait of Hormuz amidst doubts of a viable diplomatic pathway are keeping oil prices elevated in expectation of an escalation of the conflict in coming weeks,” MST Marquee’s head of energy research, Saul Kavonic, said as quoted by Reuters earlier today.
These concerns have countered a steady stream of reports about recovering oil flows out of the Persian Gulf. “For now, crude exports from the region have proved relatively resilient, helped by alternative routes and logistical adjustments. However, the market is increasingly concerned that further attacks could damage production, processing or export infrastructure, creating disruptions that cannot easily be resolved by rerouting shipments,” Saxo Bank’s head of commodity strategy, Ole Hansen, said last week.
By Irina Slav for Oilprice.com
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