Brent jumps 3.14% to $116.72, its highest settlement since April
Key Facts
Brent crude settled at $116.72 a barrel on Friday, October 23, up $3.55, or 3.14%, marking its highest settlement since April 29, according to Reuters. The rise came amid concerns about further disruption to Middle East supplies as attacks in the region escalated. West Texas Intermediate settled at $103.27 a barrel, up $3.80, or 3.8%. EL7 data showed Brent closed the previous session at $113.17, compared with $116.72 on October 23. WTI also rose from $99.47 on October 22 to $103.27 the following day.
Attacks on Saudi facilities were among the market's concerns, but Saudi Arabia's Ministry of Energy said the kingdom's defenses intercepted a drone that attempted to target a facility at the Shaybah field on the morning of October 21, and that the incident did not affect the field's operations. Debris from the drone sparked a fire in a contractor's vehicle outside the facility. The ministry said the incident killed residents from the Philippines and Nepal and injured residents from Pakistan and India. Shaybah produces about 1 million barrels of crude a day, according to The National, making the safety of its operations a focus amid supply concerns. The newspaper reported that the field's operations were unaffected by the incident.
The attacks also affected air traffic in the Eastern Province. Saudi Arabia's General Authority of Civil Aviation said King Fahd International Airport resumed operations and air traffic returned to normal after the attack on Wednesday, October 21. In a later statement, the authority said the death toll had risen to two, while the number of injured remained at 8. In a broader security development, The National reported that the U.S. State Department ordered non-emergency government employees and their families to leave Saudi Arabia, citing Houthi attacks on civilian airports and critical infrastructure. The Associated Press also reported that the United States had asked some diplomats and government employees' families to leave after a series of deadly attacks. These developments added to concerns that had fueled a risk premium in crude prices.
Oil's gains also came as U.S. commercial inventories fell. Crude stocks declined to 412.517 million barrels in the week ended October 16, from 415.577 million the previous week, according to the U.S. Energy Information Administration. In Libya, the National Oil Corporation said the closure of a pipeline valve connecting the Hamada and Dhahra fields to the port of Zawiya cut production at the two fields. Concerns over security risks in the Middle East thus coincided with falling U.S. crude inventories and supply disruption from another source. Brent had earlier risen 1.7%, or $1.81, during Thursday's session, October 22, to $110.63 a barrel by 7:36 a.m. UAE time, according to The National. Friday's settlement then extended the gains recorded in the previous session.
The U.S. Energy Information Administration's outlook points to a lower price trajectory over a longer horizon, as its October report projected most of the region's production would return to pre-conflict averages by the end of the second quarter of 2027. The agency expects spot Brent to average $87 a barrel that quarter. The estimate means the price outlook depends on the path of production returning, while regional supply developments remain a factor in current market pricing. The EIA is scheduled to release its next weekly oil inventory data on October 28. Those figures will be the next opportunity to track changes in U.S. inventories after their decline in the week ended October 16.