Brent gains amid vessel attacks and US crude stocks draw
The front-month ICE Brent contract has gained by $2.58/bbl on the day, to trade at $104.18/bbl at 09.00 GMT.
IMAGE: Oil pumpjacks. Getty Images
Upward pressure:
Brent crude’s price has moved higher, following more air assaults on commercial vessels navigating the Persian Gulf region.
An oil tanker was struck by multiple unknown projectiles within the Strait of Hormuz yesterday, the United Kingdom Maritime Trade Operations (UKMTO) agency reported.
The maritime agency has reported at least nine attacks in the key waterway so far this month, ANZ Bank’s senior commodity strategist Daniel Hynes said, adding that such attacks have resulted in a reduction in shipments from the Persian Gulf in the past.
The latest attack, that happened about 51 nautical miles north of Madinat ash Shamal, Qatar, have resulted in casualties, the UKMTO said.
“This time around, producers appear to be willing to take the risk of their vessels being damaged, as there is no alternative way to get their oil to international markets,” Hynes added.
The US Energy Information Administration (EIA) has reported a decline in crude inventories, putting further upward pressure on Brent’s price today.
Commercial US crude oil inventories decreased by around 3.2 million bbls to 424.1 million bbls in the week ending 2 October, according to data from the EIA.
A drop in US crude stocks can indicate higher demand for oil and put some upward pressure on Brent's price.
Downward pressure:
Brent’s price has felt some downward pressure after market reports showed some improvement in oil exports out of the Middle East.
Kuwait is reportedly producing at 75% of pre-war levels, while Saudi Arabia has reduced the official selling price (OSP) of the Arab Light to Asia for November loadings, in a sign of improving supply conditions.
There is also news that Iraq is hiring additional vessels to send oil through the strait.
Crude oil prices remain in a tug-of-war between increasing strikes on vessels in the Strait of Hormuz against increased flows, as the situation evolves, Hynes said.
By Aparupa Mazumder
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