Oil gains as US storm and Houthi air strikes threaten supply
USO•Brent rose 1.04% to $101.63 a barrel and U.S. WTI gained 0.89% to $90.24 as a Gulf storm and attacks on Saudi Arabia raised supply concerns. U.S. crude stocks fell by 2.09 million barrels in the week ended October 2.
1. Storm raises supply risks
Oil prices climbed as traders weighed a storm forecast to hit U.S. oil-producing and refining areas against increased Middle East crude supplies. The Gulf areas in the storm’s path produce 15% of U.S. crude oil and 5% of its natural gas, and the storm could affect six refineries. Refineries in Gulf states account for about half of U.S. capacity of 18.2 million barrels per day.
2. Stocks and Middle East
U.S. crude inventories fell by 2.09 million barrels in the week ended October 2, market sources said, citing industry data. Saudi Arabia’s East-West pipeline had recovered to 5.8 million barrels per day, while about 12 million barrels per day of crude and 2 million barrels per day of refined products had left the Middle East by tanker over the prior seven to 10 days.
3. Attacks keep concerns alive
Saudi authorities said airports in Jazan and Najran were targeted in attacks on Monday evening as hostilities with Yemen’s Iran-backed Houthis escalated. An oil analyst said attacks and refinery outages were likely to keep refined-product premiums elevated and transmit scarcity to crude; he added that prices would hold near $100 without material de-escalation.
