Oil prices climbed above $100 a barrel on Wednesday as a storm in the Gulf of Mexico threatened US oil production and attacks by Yemen’s Houthis on Saudi Arabia disrupted Middle East supply routes.
Brent crude futures were up 93 cents, or 0.92%, at $101.51 a barrel by 0022 GMT. US West Texas Intermediate crude rose 82 cents, or 0.92%, to $90.25.
The US National Hurricane Center forecast that a storm forming in the Gulf of Mexico would become the first Atlantic hurricane of 2026 within two days. The storm is expected to hit oil and gas producing facilities in the region, which accounts for 15% of US crude output and 5% of its natural gas production.
The storm’s path could affect six refineries along the US Gulf Coast. Those refineries represent about half of the country’s total refining capacity of 18.2 million barrels per day.
Tim Waterer, chief analyst at KCM Trade, described the storm as an “unwelcome complication for crude, raising the prospect of production and refining disruptions at a time when the market already has enough supply-side headaches”.
US crude oil inventories fell by 2.09 million barrels in the week ended October 2, according to data from the American Petroleum Institute cited by market sources. Gasoline stocks also declined, while distillate inventories rose slightly.
Meanwhile, supply from the Middle East has increased. Saudi Energy Minister Prince Abdulaziz bin Salman said on Tuesday that the East-West pipeline reached 5.8 million barrels per day. The head of Vitol, the world’s largest independent oil trader, reported that around 12 million barrels per day of crude and 2 million barrels per day of refined products left the Middle East on tankers over the past week to 10 days.
That flow of oil was interrupted by two attacks on Saudi Arabia’s airports in Jazan and Najran on Monday evening. The Saudi aviation authority blamed Yemen’s Iran-backed Houthis for the strikes. The attacks came as Saudi-backed Yemeni government forces launched a major offensive to reclaim territory from the Houthis, following weeks of rebel advances. Riyadh has increased airstrikes in support of the campaign.
Mukesh Sahdev, chief oil analyst at X Analysts in Sydney, said attacks and refinery outages “are likely to keep the cracks elevated and scarcity will transmit to crude. Prices will stay elevated near a $100 level without any material de-escalation emerging.”
US-Iran tensions remain unresolved. On Tuesday, former US President Donald Trump said nobody knew who was running Iran during the eight-month US-Israeli conflict with Iran. “Their leaders are gone, their second group of leaders are gone, and the biggest problem I have is nobody knows who the hell is running the country,” Trump said.
Iran’s foreign ministry spokesman responded on Sunday by saying Washington “knows very well who their counterpart is in Iran and how the decision-making system in Iran works.”
The combination of Gulf storm threats, regional conflict, and strained diplomatic relations has pushed oil prices back above the $100 mark for the first time in months.
According to Joy Online.
