Brent rises 2.9% to $111.99 as attacks on Saudi Arabia continue
Key Facts
Brent crude rose 2.9% to $111.99 a barrel during trading on Thursday, October 22, according to the Associated Press, as attacks on Saudi Arabia continued and concerns mounted over disruptions to oil supplies. Investing reported that Iran-backed Houthis continued their air attacks on Riyadh, keeping security risks in focus in the energy market. The attacks prompted the withdrawal of some U.S. diplomats and their family members from Saudi Arabia, according to the site's coverage on Thursday. Risks to oil tanker transit in the region are linked to higher shipping costs, according to the U.S. Energy Information Administration. The agency also links these risks to a higher risk premium in oil prices, extending the impact of tensions to crude transport costs and pricing alongside supply concerns.
In the U.S. stock market, the Nasdaq Composite fell 2.5% to 26,036.20 points, according to an Investing update at 17:26 GMT on Thursday. The decline came amid concerns over heavy spending on artificial intelligence infrastructure financed through debt, according to the site's coverage. The coverage also linked concerns in the sector to rising borrowing costs, with both the scale of spending and its financing adding to pressure on technology stocks. A bout of weakness had preceded Thursday's trading at the open on Tuesday, October 20, according to Reuters. The Nasdaq Composite fell 0.37% to 26,332.921 points at that opening, as artificial intelligence stocks declined and oil prices rose. Thursday's losses thus followed an earlier decline in the index during the same week, with oil and artificial intelligence stocks continuing to influence market movements.
The latest security developments follow disruptions to Saudi oil exports during September, according to a U.S. Energy Information Administration report. The report recorded the Brent spot price reaching $131 a barrel on September 15, after attacks on the East-West pipeline disrupted Saudi exports. The agency said the spot price reached "as high as $131 a barrel" in its description of price movements following those disruptions. Across the Middle East, the agency estimated crude oil production shut in during September at about 4.8 million barrels a day. Shut-in production had reached 5.8 million barrels a day in August, meaning the decline in disruptions between the months still left a large volume of regional production off the market.
In the United States, Energy Information Administration data showed commercial crude oil inventories falling to 412.5 million barrels in the week ended October 16, excluding the Strategic Petroleum Reserve. That compared with 415.6 million barrels in the previous week ended October 9, taking inventories to a lower level in the weekly comparison. Crude inventories were also below their level of 422.8 million barrels in the week ended October 17 of the previous year. By contrast, U.S. distillate inventories rose to 104.3 million barrels in the week ended October 16, according to the same weekly report. That compared with inventories of 102.6 million barrels in the week ended October 9, moving in the opposite direction to crude inventories over the week. Distillate inventories nevertheless remained below their level a year earlier, when they stood at 115.6 million barrels in the week ended October 17.
On the consumption outlook, the International Energy Agency forecast in its October Oil Market Report that global demand would decline in the final quarter of 2026. The agency put the expected decline at 2.5 million barrels a day year on year, setting its demand estimates alongside the supply disruptions affecting the region. For 2026 as a whole, it forecast an average decline in global demand of 2.6 million barrels a day, according to the same report. These estimates come as concerns over financing artificial intelligence infrastructure and rising borrowing costs coincide with declines in U.S. stocks. The Federal Reserve's official calendar schedules the next Federal Open Market Committee meeting for October 27 and 28.