Oil Prices Head for Weekly Gain as Hormuz Attacks Rattle Markets
Crude oil prices were on course to book a weekly gain earlier today, amid continuing Iranian strikes on tankers in the Strait of Hormuz and a substantial inventory draw in the United States, at 8.56 million barrels for the week to October 9. At the time of writing, Brent crude was trading at $105.48 per barrel, with West Texas Intermediate at $97.40 per barrel. Both were off highs touched earlier…
Oil prices are poised to rise by a weekly margin as Iran continues its attacks on tankers in the Strait of Hormuz, coupled with a large US inventory draw, according to recent reports. As of October 9, Brent crude was trading at $105.48 per barrel, while West Texas Intermediate stood at $97.40 per barrel, marking a slight decline from earlier highs.
However, both prices remain higher than those recorded on the previous Friday. Experts attribute this market reaction to uncertainty over Middle Eastern security and worries about the reliability of oil deliveries through the Hormuz strait. ING's commodity team noted that market participants are pricing in a considerable risk premium due to these geopolitical uncertainties.
The situation is expected to persist until there is some form of resolution between the US and Iran. Moreover, recent figures from Kpler indicate a substantial drop in oil flows, with the average daily volume falling to 11.62 million barrels in the week ending October 13, down from an average of 17.15 million barrels. The security concerns in the Persian Gulf have played a significant role in the surge of oil prices, and attempts to mitigate these risks, such as the IEA's announcement of an inventory release totaling 100 million barrels and US President Trump's proposal to lift sanctions on some shadow fleet tankers, have not yielded the desired results.
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