Oil Price Today (October 8): Crude oil jumps 2% to $102
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Oil prices climbed on Thursday, with Brent crude surpassing $102 a barrel as Middle East tensions and attacks on Gulf shipments heightened supply concerns. WTI also rose nearly 2%. Falling US crude inventories added support, while analysts warned prolonged Strait of Hormuz disruptions could push prices significantly higher, potentially toward $120.
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Loading...×Oil prices continued to rise on Thursday, with Brent crude futures crossing $102 per barrel, as investors remained concerned about supply from the Middle East amid rising attacks on shipments in the Gulf and the critical Strait of Hormuz.Oil prices have been simmering between gains and losses recently as data showed easing oil stocks but tensions persisted between Iran and US with no peace deal in near sight. Threats to oil shipments in the Gulf and the Strait of Hormuz, a critical waterway that carried around 20% of global oil and fuel shipments before the war, have increased in October as the US-Israeli conflict with Iran enters its eighth month.
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Crude oil price on October 8
Brent futures jumped more than 2% to $102.2 per barrel, while US West Texas Intermediate (WTI) crude rose nearly 2% to near $90 a barrel. This comes a day after prices settled lower on Wednesday after the International Energy Agency (IEA) agreed to speed up the release of oil stocks and to prioritize diesel supplies under a plan launched in March, as governments seek to fight record fuel prices and supply disruptions caused by war in the Middle East that began late in February and triggered massive spikes in oil prices.Last week, attacks on tankers moving through the Strait of Hormuz hit their highest in any week since the Iran war began earlier this year while Gulf producers increased exports. The increase in attacks came as more crude is flowing out of the Gulf but at higher costs and risk to cargoes and crew. A tanker in the north of Qatar was struck by multiple projectiles, causing casualties, the United Kingdom Maritime Trade Operations agency said on Wednesday.
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"In the past, such attacks have resulted in a reduction in shipments from the Persian Gulf. 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," Reuters quoted Daniel Hynes, senior commodity strategist at bank ANZ, as saying.
Crude inventories meanwhile dropped by 3.2 million barrels to 424.1 million barrels last week, the Energy Information Administration said on Wednesday, compared with analysts' expectations in a Reuters poll for a 1.7 million-barrel decline.
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What lies ahead for oil prices?
JPMorgan analysts said the outcome of the Middle East conflict remained difficult to assess, noting that there was uncertainty over how the situation could develop. When the war began, the bank had assumed that there were economic thresholds the US administration would not cross. Six months into the conflict, JPMorgan said several of those thresholds had been crossed, while there was still no clear exit strategy.The risk of further supply disruptions has also increased the possibility of higher oil prices. Daan Struyven, co-head of global commodities research at Goldman Sachs, said recent attacks had shown that disruptions to shipping could spread and become more severe.
Goldman Sachs has outlined a scenario in which oil prices could rise to as much as $120 a barrel if attacks on vessels in the Middle East intensify. If exports return to normal, the bank expects oil prices to move back towards $80 a barrel.
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Disclaimer: This article has been written by Debaroti Adhikary, who is not a SEBI-registered Research Analyst or an Investment Adviser. Debaroti Adhikary and his/her ‘relative(s)’ (as defined under Section 2(77) of the Companies Act, 2013) do not hold any financial interest in the companies mentioned in this article as of the date of publication. The views/recommendations mentioned in this article, wherever applicable, are those of the respective SEBI-registered Research Analyst/brokerage and have been reproduced/reported with due attribution. They should not be construed as the views or recommendations of The Economic Times Digital or the journalist. Readers are advised to consider the original research report and make their investment decisions based on their own assessment. Brokerage disclaimers here.
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Figures reflect the source report and its stated period. This article is for information and is not investment advice.
