Brent crude hits five-month high amid Houthi attacks and UAE oil spill
Brent crude rose to US$114.99 per barrel on Friday, its highest since early May, after Houthi attacks in Saudi Arabia and an oil spill off the UAE coast stoked supply concerns. The benchmark is on track for a 4.4 per cent weekly rise.
Oil prices rose on Friday, with Brent crude touching its highest since early May, after Houthi attacks in Saudi Arabia stoked concern over further disruption to energy supplies from the Middle East where UAE authorities also reported an oil spill.
Brent crude futures gained US$1.71, or 1.5 per cent, to US$114.99 a barrel by 1300 GMT, having earlier reached US$115.16, the highest level since May 4. US West Texas Intermediate crude gained US$1.80, or 1.8 per cent, to US$101.27. The Brent benchmark is on track for a 4.4 per cent weekly rise, its third in a row, while WTI is poised to finish 0.4 per cent down on the week.
Saudi Aramco on Thursday ordered the evacuation of its headquarters in Dhahran on the Gulf near Bahrain, Reuters reported, as fighting intensified between the world's largest crude exporter and Yemen-based Houthis. An oil spill from a tanker was detected off the UAE coast of Umm Al Quwain, the United Arab Emirates Ministry of Climate Change and Environment said on Friday. It did not say what caused the spill and authorities have not identified the tanker involved.
Shipping sources said on October 9 that the Gem No.2 was struck by an unidentified projectile 13 nautical miles west of Al Jazeera in the UAE. “The market remains concerned about a potential escalation, which, in a worst-case scenario, could trigger renewed supply disruptions,” said UBS analyst Giovanni Staunovo, adding that volatile oil flows and elevated freight rates have left the market undersupplied.
Clashes between the Houthis and a Saudi-led coalition that backs Yemen's internationally recognised government have raged since the Iran-aligned Houthis pushed towards Bab el-Mandeb last month, a shipping chokepoint at the mouth of the Red Sea. In Libya, an oil pipeline valve from the Hamada and Tahara oilfields to Zawiya port has been shut, leading to a reduction in production at both fields, the head of the National Oil Corporation told Reuters on Thursday.
Meanwhile, the first Russian diesel bound for the US since an export agreement between Moscow and US President Donald Trump is aboard a tanker heading for New York, ship-tracking data showed on Friday. Trump announced the deal this month as part of his efforts to bring down soaring diesel prices ahead of US midterm elections on November 3.