Oil prices rise as storms and air strikes threaten supply

Oil prices surged on Wednesday due to concerns over supply disruptions from an approaching storm in the US and Houthi attacks on Saudi Arabia. Brent futures climbed 93 cents, or 0.92%, to $101.51 a barrel, while US West Texas Intermediate (WTI) crude increased 82 cents, or 0.92%, to $90.25.

The storm is projected to become the first Atlantic hurricane of 2026 within two days, threatening oil and gas production facilities in the Gulf of Mexico. This region contributes 15% of US crude oil and 5% of the country's natural gas. Analysts warned that the storm could disrupt production and refining, exacerbating the market's current supply-side challenges.

Last week, US crude oil and gasoline inventories declined, while distillate stocks rose slightly, according to the American Petroleum Institute. Crude oil stocks dropped by 2.09 million barrels in the week ending October 2. Saudi Arabia's Energy Minister reported that crude oil and refined products were being transported at a rate of 12 million barrels per day via tankers in the past week.

However, recent attacks on Saudi Arabia's Jazan and Najran airports added to the geopolitical tensions. These strikes come amid escalating hostilities between Saudi Arabia and Yemen's Iran-backed Houthis, as Riyadh intensifies airstrikes to support their campaign against the rebels. Analysts anticipate that production and refinery outages, along with elevated scarcity, will maintain crude prices near the $100 level without significant de-escalation.