Oil hits five-month high as Houthi strikes on Saudi Arabia lift risk premium
Oil prices rose about 4 percent to a five-month high on Thursday, with Brent futures settling at $113.17 a barrel, after Houthi attacks on Saudi Arabia heightened concerns about disruption to supplies from the main exporting region.
Brent gained $4.35, or 4.0 percent, while US West Texas Intermediate crude rose $2.32, or 2.4 percent, to settle at $99.47. The Brent close was its highest since May 4 and left the global benchmark technically overbought for the third time in a week.
Analysts at energy advisory firm Ritterbusch and Associates attributed the move to a further injection of risk premium tied to the Houthi attack, alongside talk of a combined US and Israeli strike on Iran after the mid-term elections. Saudi Aramco told staff to evacuate its headquarters in Dhahran, Reuters reported, as fighting between the world's largest crude exporter and Yemen's Houthis intensified. PVM Oil analyst Tamas Varga said reports of Middle East crude exports exceeding pre-conflict levels were outweighed by attacks on ships in the Strait of Hormuz and strikes on Saudi oil infrastructure. Morgan Stanley analysts estimated Middle East crude exports at around 17 million barrels per day last week, against an average of about 18 million bpd in the 12 months before the start of the Iran war, according to Kpler.
In the US, refiner Valero Energy reported its highest-ever quarterly profit, beating Wall Street expectations, as fuel supply disruptions linked to the wars in Iran and Ukraine boosted margins in the third quarter. Russia continued missile and drone strikes on Ukraine overnight, and said it was ready to resume US-mediated talks next month. Russian officials also urged the EU to reconsider plans to ban imports of Russian LNG, while the European Parliament approved a three-year delay to EU methane emissions rules for oil and gas imports.
In Libya, the head of the National Oil Corporation told Reuters that a pipeline valve from the Hamada and Tahara oilfields to Zawiya port had been shut, reducing production at both fields.
