Brent jumps 3.14% to $116.72 a barrel as supply risks mount

Key Facts

Brent futures settled at $116.72 a barrel on Oct. 23, up 3.14%, marking their highest settlement since April 29, Reuters reported. The gain came as concerns resurfaced about disruptions to energy supplies from the Middle East following Houthi attacks in Saudi Arabia. Emirati authorities also reported an oil spill, adding to concerns over crude flows from the region. Brent rose from less than $97 a barrel at the start of October to its highest level since June 2022. For the week ended Oct. 23, Brent gained 6%, while West Texas Intermediate rose 2.3% to $103.27 a barrel.

Oil's rise came as U.S. stocks ended the Oct. 23 session lower: the S&P 500 fell 0.5%, the Dow Jones dropped 1.2%, and the Nasdaq Composite declined 0.2%, according to the Associated Press. The 10-year U.S. Treasury yield closed at 4.99%, compared with 4.96% at the end of the previous session. The latest available Nasdaq Composite reading before Friday's session was 26,008.86 on Oct. 22. In the U.S. oil market, commercial crude inventories, excluding the Strategic Petroleum Reserve, fell by about 3.1 million barrels in the week ended Oct. 16 to 412.5 million barrels. That was 2.4% below the level a year earlier.

Energy Information Administration data for the same week showed divergent moves in refined-product inventories: gasoline stocks fell by 3.0 million barrels, while distillate stocks rose by 1.7 million barrels. Domestic crude oil production was 13.269 million barrels per day, down 410,000 barrels per day from the previous week. The figures coincided with Brent's rise, but inventory data alone do not establish the cause of daily price moves. In inflation data, the U.S. consumer price index rose 3.7% year over year in September, after a 3.4% increase in the 12 months through August. The index excluding food and energy rose 2.6% year over year in September.

September data showed acceleration in energy components: the energy index rose 5.2% during the month, while the gasoline index increased 9.1% month over month and 34.2% in the 12 months through September. This comes as rising crude prices have become a concern for energy costs and inflation. In the University of Michigan survey, the final consumer sentiment reading was 48.0 in October, compared with 48.1 in September, making it the second-lowest reading on record after 44.8 in May.

Consumers' inflation expectations for the next 12 months rose to 4.7% in October from 4.6% in September, while their expectations for inflation over the next five years increased to 3.5% from 3.4%. Separately, the Associated Press reported that estimates pointed to a 3.7% rise in the personal consumption expenditures index in September, compared with the Federal Reserve's 2% target. The Federal Open Market Committee will meet on Oct. 27 and 28, with a news conference scheduled for Oct. 28. Kevin Warsh became chair of the Federal Reserve Board on May 22, 2026, and his term as chair ends on May 21, 2030. The U.S. Bureau of Economic Analysis will release preliminary third-quarter GDP data, along with September personal income and spending data, on Oct. 29 at 8:30 a.m.