Brent crude climbed back above $101 a barrel on Wednesday after Houthi attacks on two Saudi airports revived concerns over Middle East crude flows, even as Saudi Arabia's East-West pipeline kept recovering. West Texas Intermediate held close to flat as traders weighed improving physical supply against persistent geopolitical risk.
Oil rose Wednesday as attacks by Yemen's Iran-backed Houthis on Saudi Arabia raised concerns over crude flows from the Middle East, even as regional supplies have been recovering. Futures for Brent crude gained 0.44% to $101.02 a barrel, while U.S. West Texas Intermediate futures held broadly flat at $89.46 a barrel.
Saudi airports targeted as Houthi hostilities escalate
Brent was trading at $101.49 a barrel and WTI at $90.14 a barrel later Wednesday, Investing.com reported, as the attacks overshadowed signs of a supply recovery.
Saudi Arabia's aviation authority said Tuesday that airports in Jazan and Najran were targeted in two attacks, as fighting between the kingdom and Yemen's Houthis intensifies. Jazan is also home to a 400,000-barrel-per-day Aramco refinery, raising the stakes of any strike near the site. Naeem Aslam, chief investment officer of Zaye Capital Markets, said oil remains "caught between improving physical supply and persistent geopolitical risk."
Pipeline flows recover, but the Strait of Hormuz stays a flashpoint
Saudi Arabia's East-West pipeline carried 5.8 million barrels a day as of Tuesday morning, Saudi Energy Minister Prince Abdulaziz bin Salman said, pointing to a recovering flow of crude oil out of the kingdom. Iran has stepped up attacks on tankers transiting the Strait of Hormuz, threatening to disrupt the fragile rebound in oil exports through the waterway. The strait has been effectively closed since shortly after a joint U.S.-Israeli assault on Iran in late February, according to Deutsche Bank analysts.
Freight costs and a Gulf Coast storm add to the squeeze
Supertanker rates have surged past $1 million a day, with the jump spreading to smaller vessels too, Sparta Commodities senior oil market analyst June Goh said this week. A storm system approaching the U.S. Gulf Coast could also strike areas producing 15% of U.S. crude oil and 5% of the country's natural gas, Reuters reported, with forecasters saying it may become the first Atlantic hurricane of 2026 within two days. U.S. oil inventories fell 2.09 million barrels in the week to October 2, according to data from the American Petroleum Institute.
Sources: CNBC International, Commodities Analysis & Opinion, Commodities & Futures News
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