Oil prices rose on Wednesday as a storm threatened production and refining operations in the US Gulf while attacks in Saudi Arabia added to concerns over Middle East supply.
Brent crude futures rose 93 US cents or 0.92% to US$101.51 a barrel by 0022 GMT, while US West Texas Intermediate crude gained 82 US cents or 0.92% to US$90.25.
A storm forming in the Gulf of Mexico is expected to become the first Atlantic hurricane of 2026 within two days and could hit oil and gas facilities, according to US forecasters.
Offshore areas in its path account for 15% of US crude production and 5% of natural gas output. The storm could also affect six refineries, with refineries across US Gulf states representing about half of the country’s 18.2 million barrels per day of refining capacity.
KCM Trade chief analyst Tim Waterer said the storm was 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 and gasoline inventories fell last week while distillate stocks rose marginally, according to American Petroleum Institute data cited by market sources. Crude inventories fell by 2.09 million barrels in the week ended Oct 2.
However, rising Middle East supply has provided some counterweight to the disruption risks. Saudi Energy Minister Prince Abdulaziz bin Salman said the East-West pipeline had reached 5.8 million barrels per day, while Vitol’s chief said around 12 million barrels per day of crude and 2 million barrels per day of refined products had left the Middle East by tanker over the past seven to 10 days.
Supply risks were compounded after airports in Saudi Arabia’s Jazan and Najran were targeted in two attacks on Monday evening as fighting between Saudi-backed Yemeni government forces and Iran-backed Houthis escalated.
“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,” said Mukesh Sahdev, chief oil analyst at X Analysts in Sydney.
Meanwhile, US-Iran tensions showed little sign of easing, with US President Donald Trump saying on Tuesday that Washington did not know who was running Iran following the eight-month US-Israeli war.
“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 said on Sunday that Washington knows who its counterpart is in Iran and understands how the country’s decision-making system works.
Reuters
