Brent oil prices rose during Thursday morning trading, briefly moving above $104 per barrel, as renewed geopolitical tensions increased concerns over potential disruptions to global supplies. The latest escalation followed new attacks by Yemen’s Iran-backed Houthis on Saudi Arabia’s airports. At the same time, attacks on tankers in the Gulf and the Strait of Hormuz have intensified, reinforcing the geopolitical risk premium already embedded in oil prices. Concerns over availability are also being amplified by developments in the United States, where producers have started shutting offshore production in the Gulf of Mexico ahead of storm Isaias. Around a quarter of the region’s oil production had been taken offline by Wednesday. Meanwhile, the latest US inventory data showed crude stocks falling by 3.2 million barrels last week, almost twice the decline expected by the market. Against this backdrop, with tensions increasing around several key Middle Eastern supply routes and part of US production temporarily offline, there is scope for further increases in oil prices.
Ricardo Evangelista, ActivTrades
Source: ActivTrader
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