Oil set for fourth monthly gain as Hormuz tanker attack highlights supply risks from war
USO•Brent rose 13% and WTI 14% in October as an attack on a tanker in the Strait of Hormuz highlighted supply risks. On Friday, Brent was up 1.49% at $116.59 a barrel and WTI gained 1.42% to $103.45.
1. Prices rise on supply fears
Oil prices rose on Friday and were set for a fourth monthly gain as an attack on a tanker in the Strait of Hormuz highlighted supply risks from the US-Israeli war on Iran. Brent’s December contract advanced $1.71 to $116.59 a barrel, while the more-active January contract gained $1.71 to $112.51. WTI climbed $1.45 to $103.45.
2. Attacks heighten concerns
The UKMTO said a tanker in the Strait of Hormuz, a key sea outlet for Gulf crude and fuel supplies, was hit by explosive devices attached by a small boat. It was not immediately clear who was behind the attack. On Thursday, the Houthis said they had attacked sites in Saudi Arabia, including oil facilities; a Saudi-led coalition said it intercepted a cruise missile launched toward the kingdom.
3. Volatility expected
Saul Kavonic of MST Marquee said continued action around the strait and doubts about a diplomatic path were keeping prices elevated. Ole Hansen of Saxo Bank said prices could become more volatile around Israel’s parliamentary election and the US midterm vote. He expects crude to trade in a higher range of $70 to $90 a barrel after the conflict ends, compared with a pre-war range of $60 to $70, citing the risk of renewed hostilities and the need to replenish inventories.
