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Summary
Brent crude climbed above $101 per barrel on Wednesday, extending gains from Tuesday's session.
A Houthi ballistic missile aimed at Khamis Mushait in Saudi Arabia and nine tanker incidents in the Strait of Hormuz this month kept supply risks in focus.
Recovering Hormuz flows and a restored 5.8 million barrels per day on Saudi Arabia's East-West pipeline capped the gains.
Gotrade News - Oil prices rose on Wednesday, October 7, with Brent crude climbing above $101 per barrel and extending gains from the previous session. According to Trading Economics, persistent risks to Middle East energy flows overshadowed signs of rising supply from the region.
The move builds on a choppy Tuesday session. Per Trading Economics, Brent fell to $97.8 a barrel early on Tuesday before paring most of those losses to trade around $100.1 as supply concerns resurfaced.
Houthi Missile on Saudi Arabia and Hormuz Tanker Attacks Lift Brent
Two fronts are driving the risk premium. As reported by Trading Economics, a Saudi-led coalition said it intercepted and destroyed a ballistic missile the Houthis launched toward Khamis Mushait in Saudi Arabia.
At the same time, Iran has intensified attacks on tankers in the Strait of Hormuz in recent days. The UK Maritime Trade Operations has reported nine incidents so far this month, according to Trading Economics.
Hormuz Flows and Saudi East-West Pipeline Cap the Rally
Supply data has been pulling the other way. According to OilPrice.com, provisional Kpler data showed oil flows out of the Strait of Hormuz ranged between 19.5 million and 22.5 million barrels per day between September 27 and 29, roughly double the daily flows of a month earlier, which Reuters characterized as above pre-war levels.
Saudi Arabia's East-West pipeline has also restored its crude pumping capability to 5.8 million barrels per day, per Trading Economics.
The tug of war between attacks on Gulf energy routes and recovering export volumes is what traders will be weighing as the official US inventory data lands.
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M. Alfathan Rahman is a content writer with over 3 years of experience developing digital content strategies across various industries, including fintech. He has experience producing content for tax-related websites and financial education platforms registered with Kominfo (Indonesia's Ministry of Communication and Informatics). His focus areas include data research, and crafting financial articles that are informative, accurate, and accessible to investors of all experience levels.
Hendrie Saputra holds a Master of Business Administration (MBA) with a concentration in Business Risk & Finance, along with professional experience in finance, marketing, and project management. He is experienced in analyzing market data and developing research-driven business strategies.
