Commodities
Brent climbs above $117, its highest since early May, as Houthi strikes on Saudi Arabia widen
The global crude benchmark rose about 3.6% on Friday afternoon as attacks on Saudi airports, defence sites and an Aramco facility put a third straight weekly gain within reach.
HedgeWeekly News Desk ·
Brent crude rose 3.59% to $117.20 a barrel at about 15:58 GMT on Friday, according to The National, while West Texas Intermediate added 3.57% to around $103. The move stretched a rally that had already lifted Brent to an intraday $115.16 by midday London time, which Reuters said was the highest level since May 4.
The Houthis said that over the previous 48 hours they had struck the Saudi Defence Ministry headquarters in Riyadh, King Fahd International Airport in Dammam, an Aramco site at the Red Sea loading port of Yanbu and Abha International Airport. Two people were killed in the Dammam attacks. Saudi Aramco ordered staff out of its Dhahran headquarters on Thursday, and on Friday the UAE environment ministry reported an oil spill off Umm Al Quwain without giving a cause.
Supply worries outside the Gulf added to the bid. Libya's National Oil Corporation said a pipeline valve linking the Hamada and Tahara fields to the Zawiya refinery had been shut, cutting output from both fields in a country producing about 1.4 million barrels a day. UBS analyst Giovanni Staunovo told Reuters the market was worried about further escalation, while MUFG analysts noted that Gulf production and exports through Hormuz were still close to pre-conflict levels even as shipping costs stayed high.
Why it matters: Reuters put Brent up about 4.4% on the week by 13:00 GMT, before the afternoon jump, which keeps it on course for a third consecutive weekly gain. The timing is awkward for the Federal Reserve, which decides on rates on October 28 with futures pricing roughly an 80% chance of a hike by December, and for consumers: the University of Michigan survey released on Friday showed one-year inflation expectations rising to 4.7%. With the first Russian diesel cargo under the new US-Russia export arrangement not due in New York until around November 10, after the November 3 midterms, fuel prices remain a live political and market risk.