Oil Prices Are Once Again on the Brink of $100

Oil prices have surged towards the $100 mark following a series of events that have rattled global markets. The recent Houthi attacks on Saudi energy infrastructure, combined with US strikes on Iranian tankers, have contributed to the price increase. Additionally, renewed tensions in the Middle East have added to the uncertainty in the market.

In Europe, gas prices have also seen a significant rise, with prices jumping to 75 per MWh ($25.5 per MMBtu), the highest since 2022. This surge is due to low inventories, which have sparked fears of winter supply shocks. Currently, European gas inventories stand at 66% capacity, with Germany and the Netherlands being particularly vulnerable ahead of the winter season.

The Middle East has been a key source of tension, with OPEC holding October production targets steady after a September rollback of its voluntary cut. Meanwhile, President Trump has threatened trade embargoes against countries running surpluses against the US, should the Federal Reserve not cut its policy rate.

Iran has also threatened to establish a new maritime exclusion zone in the Gulf, which could potentially claim UAE and Oman ports. Additionally, Houthi missile and drone attacks have forced the shutdown of operations at several Saudi energy facilities, including the Jazan refinery. This has further exacerbated the already tense situation in the region.

On the production side, Nigeria's Dangote refinery has announced plans to invest $14.3 billion to double its processing capacity by 2029. Meanwhile, China's crude imports have rebounded, rising 6.2% month-on-month to 8.93 million b/d. China's product exports have also jumped 29% from July, despite ongoing weakness in domestic fuel demand.

Argentina's government has threatened criminal complaints against Navitas Petroleum for its activity in the Falkland Islands, intensifying pressure on the Sea Lion project. Meanwhile, Ukraine has reported drone strikes on Rosneft's Ryazan refinery, marking the most significant hit in September to date. Copper has also hit a record high as global stocks shrink, with the LME's benchmark three-month contract climbing to $14,617 per tonne.