Brent rises to $102.28 amid attacks in the Strait of Hormuz — The Express Tribune
Amid lower production in the United States and risks to supplies from the Middle East, Brent crude futures on Thursday rose by $2.28, or 2.28%, to $102.28 per barrel as of 04:27 GMT. U.S. WTI crude rose by $1.66, or 1.88%, to $89.94 per barrel. The Express Tribune reports.
Risks to shipping
Before the war, the Strait of Hormuz carried volumes equivalent to about 20% of global oil and fuel supplies. According to the outlet, last week the number of attacks on tankers transiting the strait became the highest for the entire period of the war between the United States, Israel and Iran. This is happening amid increased exports by producers in the Persian Gulf countries.
On Wednesday, the United Kingdom Maritime Trade Operations reported that a tanker north of Qatar was hit by several projectiles. There were casualties as a result. Saul Kavonic, head of energy research at MST Marquee, said that the frequency of Iranian attacks on ships had reached its highest level since the start of the war and could increase further.
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U.S. inventories and production
An additional factor for prices was reduced production in the U.S. Gulf of Mexico due to the approaching Hurricane Isaias. Shell and Chevron reported restrictions on offshore operations. As of Wednesday, producers in the U.S. part of the Gulf of Mexico had shut in approximately 25.08% of current oil production and 16.37% of natural gas production, according to the Bureau of Ocean Energy Management.
U.S. inventory data also supported prices: in the week ending October 2, oil inventories fell by 3.2 million barrels to 424.1 million barrels. Analysts polled by Reuters had expected a decline of 1.7 million barrels. Distillate fuel inventories, including diesel and jet fuel, decreased by 42,000 barrels to 105.14 million barrels.
The previous day, prices had declined after the International Energy Agency decided to accelerate the release of oil reserves and prioritize diesel supplies. ANZ analyst Daniel Hynes noted that these volumes were likely already included in the initial plan to release 400 million barrels, while strategic reserves can only temporarily increase supply flows and do not create new production capacity.
