Market Wrap: Oil Prices Inched Higher Slightly in 5 Days
Oil prices surged modestly week on week as concerns about possible US military action against Iran and threats to Middle East supplies offset hopes for renewed talks.
International benchmark Brent crude futures for January delivery traded at $113.29 per barrel, up 1.4% from last Friday’s close of $111.70. US benchmark West Texas Intermediate (WTI) crude futures for December delivery traded at $104.17 per barrel, up about 0.9% from $103.27 a week earlier.
Prices fluctuated throughout the week as diplomatic efforts to ease US-Iran tensions competed with reports of attacks on Saudi energy facilities and threats to shipping through the Strait of Hormuz.
Oil fell early in the week after US President Donald Trump ruled out an immediate strike on Iran. Talks involving Turkish, Saudi and Pakistani officials in Tehran also raised hopes of easing tensions.
But Houthi claims of attacks on Saudi Arabia’s East-West oil pipeline and Ras Tanura refinery brought supply concerns back into focus. The pipeline provides a route for Saudi crude exports through the Red Sea, bypassing the Strait of Hormuz.
An unexpected draw in US crude inventories lent further support to prices. US commercial crude oil inventories fell by 0.5% in the week ended Oct. 23, according to data released by the Energy Information Administration (EIA) on Wednesday.
Inventories decreased by about 1.9 million barrels to 410.6 million barrels, while market expectations had pointed to an increase of around 100,000 barrels.
Strategic petroleum reserves, excluded from commercial crude stocks, decreased by about 100,000 barrels to 282.6 million barrels.
Over the same period, gasoline inventories rose by approximately 3.9 million barrels to 209.2 million barrels. EIA data showed that US crude oil production increased by 723,000 barrels per day (bpd) to approximately 13.99 million bpd in the week ended Oct. 23.
Traders were also looking ahead to Sunday’s meeting of seven OPEC+ members. Saudi Arabia, Russia, Iraq, Kuwait, Kazakhstan, Algeria and Oman will meet to review oil market conditions, OPEC said. Prices slipped Thursday again as Qatar-led efforts to restart US-Iran talks eased fears of further supply disruptions.
By Friday, attention had shifted back to the risk of military action. The Wall Street Journal reported that Adm. Brad Cooper, head of US Central Command, briefed Trump on options for strikes against Iran at the White House on Thursday.
A tanker incident in the Strait of Hormuz added to the uncertainty. The United Kingdom Maritime Trade Operations said Thursday that a tanker had been hit by an unidentified projectile while leaving the waterway. No crew injuries or environmental damage were reported.
