DTN Oil Update
Oil Prices Surge on Houthi Attacks, Escalation Signs
VIENNA (DTN) -- Brent futures jumped to their highest since May Thursday morning following a fresh wave of Houthi attacks on Saudi Arabia. A U.S. State Department order to evacuate diplomats and their families from the country, meanwhile, stoked concerns of the conflict escalating further.
By 8:55 a.m. EDT, ICE Brent for December delivery was up $3.21 to trade near $112.03 bbl, and NYMEX WTI for December delivery rose $2.46 to $99.61 bbl, after touching a high of $100.09 bbl earlier in the session.
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Downstream, NYMEX ULSD for November delivery jumped $0.1511 to $4.9144 gallon, and front-month RBOB futures advanced $0.0828 to $3.2033 gallon.
The U.S. Dollar Index remained unchanged at 101.6 points against a basket of foreign currencies.
Oil fields, government buildings and an airport were among the latest targets struck by the Tehran-allied group. Saudi Aramco said that there was no impact to oil production operations, but the successful attacks still raised supply concerns as they highlighted the vulnerability of energy infrastructure in the region, and Saudi Arabia's seemingly limited means to protect vital assets.
The U.S. State Department, meanwhile, ordered the evacuation of diplomatic staff and their families from several sites in Saudi Arabia. The move stoked fears of an imminent escalation in fighting and the possible return of U.S. military operations against the Houthis. Reports suggesting the U.S. is also planning to withdraw personnel from other countries in the region also contributed to a higher risk premium.
Attacks on tankers in the region also continued. Iran's armed forces on Thursday claimed to have struck four oil tankers in the Persian Gulf, and said that another three vessels had collided with mines in the Strait of Hormuz. Separately, the United Kingdom Maritime Trade Operations Center on Wednesday reported that a tanker was struck in the Gulf of Oman.
In the U.S., meanwhile, crude oil inventories last week declined by more than expected, Energy Information Administration data published Wednesday showed. Refining activity at a seasonal record high and a lull in offshore production contributed to the second consecutive larger-than-anticipated draw. Volumes held in commercial inventories dropping below year-ago levels for the first time since early August also coincided with the end of significant emergency stockpile releases.
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