Brent rises to $115.36 as Saudi refinery attack revives supply concerns
Key Facts
Brent crude futures rose $1.48, or 1.3%, to $115.36 a barrel in Wednesday, October 28 trading, while West Texas Intermediate rose $1.22, or 1.22%, to $101.12, according to Reuters. The move came as supply concerns revived after an attack on a Saudi refinery, the agency reported. The Houthis said they targeted Saudi Arabia’s largest oil refinery with a missile on Tuesday. Saudi authorities did not immediately confirm the attack, according to the report. The price movement does not establish that a specific U.S. warning about possible Iranian strikes caused the rise.
EL7’s daily closing data show Brent ended October 28 at $115.32 a barrel, compared with $113.88 on October 27. WTI also closed at $101.93, versus $99.90 the previous day. These readings differ from the trading prices Reuters reported during Wednesday, as they reflect different price measures. Wednesday’s rise was a recovery after futures fell about $2 a barrel in Tuesday’s session. Reuters said Middle East talks had helped ease some supply concerns at the time.
Renewed concern about supplies comes amid threats and risks linked to shipping in the region. The Associated Press reported that the U.S. State Department reduced staffing at four embassies in the Middle East after intelligence indicated Iran was stepping up efforts to target U.S. personnel. The agency also said Iran’s Revolutionary Guard navy threatened to target U.S. military bases in the region if Washington continued helping commercial ships transit the Strait of Hormuz. The agency reported that October saw the highest number of reported attacks on commercial shipping since March, according to British maritime monitor. It said 28 attacks targeted ships in October, the highest number since the start of the war, according to Lloyd’s List Intelligence, while oil tankers continued to transit the strait under U.S. military protection.
Gulf shipping and energy flows remain in focus for markets as risks to maritime routes persist. The head of Aramco said oil flows through the East-West pipeline, which bypasses the Strait of Hormuz, had risen to three times their previous level during the energy crisis. He added that the pipeline’s capacity had increased from 2 million barrels a day to 7 million. On October 28, Iranian Foreign Minister Abbas Araghchi warned that any attack instigated by Israel in the Gulf region would have devastating effects on international markets. A U.N. spokesperson called for diplomacy between Washington and Tehran to resume, to reopen the strait and ease tensions.
On the U.S. data front, the Bureau of Economic Analysis calendar lists October 29 at 8:30 a.m. as the release time for the advance estimate of third-quarter gross domestic product and the September personal income and outlays report. Both releases are scheduled for the same time. The inventory decline figure attributed in the draft to the Energy Information Administration report could not be confirmed from the weekly report page reviewed. The latest period shown there was the week ended October 16. The upcoming economic data follow a day of oil trading that reflected renewed supply concerns in the market.