Brent Jumps 2.81% to $116.35 as Supply Risks Mount
Key Facts
Brent crude futures rose 2.81% to $116.35 a barrel at 18:06 GMT on October 23, after reaching $117.45 during the session, its highest level in about 6 months, according to Reuters. The advance came as concerns resurfaced about disruptions to energy supplies in the Middle East following Houthi attacks in Saudi Arabia. UAE authorities also detected an oil spill off the coast of Umm Al Quwain, adding to concerns about crude flows from the region. EL7 data showed Brent closed at $117.25 that day, compared with $113.17 on October 22. Crude was on track for a weekly gain of 6%, while West Texas Intermediate was headed for a weekly rise of 1.5%.
The rally extended to West Texas Intermediate, which rose 3.52% to $102.97 a barrel at the same time, Reuters reported. The agency linked gains in both benchmarks to concerns about further disruption to energy supplies from the Middle East. Aramco ordered the evacuation of its headquarters in Dhahran on Thursday as fighting between Saudi Arabia and the Houthis in Yemen escalated, according to Reuters. In the UAE, the Ministry of Climate Change and Environment said it had detected an oil spill from a tanker off the coast of Umm Al Quwain. The ministry did not identify the cause of the spill, and authorities did not identify the tanker involved. The developments came as oil prices reached elevated levels compared with previous months, with Brent hitting its highest session level since late April.
In semiconductors, SK Hynix halted its review of a planned initial public offering of its Solidigm unit in the United States, citing market volatility, according to Reuters. The move came after South Korean authorities raised concerns that the deal could harm the interests of the company's shareholders. SK Hynix had been considering listing the unit, which specializes in NAND memory and solid-state drives, to help finance a new factory in the United States. The proposed funding was also intended to meet rising demand for AI data center chips. The company said the offering could have provided funding for share cancellations and buybacks, as well as supported Solidigm's expansion. People familiar with the plans estimated that the share sale could have raised $15 billion and valued the unit at $150 billion.
SK Hynix stressed that halting the IPO review did not reflect a change in the unit's operating position or investment plans, saying: "This decision does not reflect any change in Solidigm's growth outlook or investment needs." The decision affected trading in the stock: SK Hynix shares ended the October 23 session up 4.4%, outperforming the broader market, which was flat, according to Reuters. The agency attributed the performance to easing investor concerns about dilution of SK Hynix shareholders' stakes as a result of a Solidigm listing. The decision leaves the company weighing external funding to expand data center chip production against preserving shareholder interests amid market volatility. Halting the review does not mean the company has backed away from its growth expectations for the unit, according to its statement.
In telecommunications, SpaceX is in talks with cellular infrastructure companies to secure access to at least 80,000 sites in the United States, according to a Bloomberg report cited by Reuters, which quoted people familiar with the matter. If agreements are reached, they could pave the way for the company's bid to build a fourth national wireless carrier, but do not mean a service is launching yet. The targeted number of sites is equivalent to about half of the 158,500 purpose-built, operating cell towers in the United States in the year before the report. Crown Castle operates about 40,000 U.S. cell towers, according to the report. TD Cowen estimated that building a national ground network would cost more than $80 billion and require many years and billions more in spending. These estimates underscore the scale of the infrastructure and funding needed to turn talks into an operating network.
U.S. telecom stocks reacted to the report before Friday's open, with AT&T, Verizon and T-Mobile shares falling between 4.2% and 5% in extended trading on October 22, Reuters reported, citing Bloomberg. The move comes as SpaceX explores access to existing sites rather than relying solely on its stated plan to build a network, while the talks remain preliminary. TD Cowen's estimate of more than $80 billion for the ground network alone puts the project's potential cost in a broad range before accounting for years of implementation and additional spending. The move links SpaceX's ambition to enter the telecom market with operators' need for widely deployed infrastructure. No subsequent timeline for the talks or potential agreements was included in the available information.