Oil prices surge on Middle East tensions and hurricane threat
Summarised from 3 outlets · 4 reports · Updated 8 Oct, 13:55 · Archive
Brent crude rose about 5% to $105 a barrel on Thursday amid shipping attacks in the Middle East and a hurricane threatening US oil production.
Oil prices surged on Thursday as supply concerns mounted from escalating Middle East tensions and weather disruptions in the Gulf of Mexico. Brent crude, the international benchmark, rose about 5% to $105 a barrel, triggering a wave of selling across global bond and stock markets.
The price rises were driven by two separate supply concerns. In the Middle East, the UK Maritime Trade Operations reported a tanker struck by projectiles near Qatar on Wednesday evening and a series of strikes on vessels within the Strait of Hormuz over the past week. The strait carries about a fifth of the world's oil and gas supplies, and the disruptions have pushed up global prices. In the Gulf of Mexico, the approaching Tropical Storm Isaias prompted Shell and Chevron to halt offshore operations, adding further pressure on crude supply.
The rising oil prices rippled through financial markets. UK government borrowing costs rose sharply, with the yield on the 10-year gilt reaching about 5.53% during the day, the highest level since 2007. The yield on the 30-year bond touched 6.0117%, the highest since January 1998. Investors appeared concerned that rising oil prices could stoke higher inflation.
Dan Coatsworth, head of markets at AJ Bell, said: 'Concerns around potential damage from Tropical Storm Isaias has led Shell and Chevron to curtail offshore operations in the Gulf, adding to supply concerns that were already front of mind thanks to ongoing Middle East conflict.'
The Guardian reports that the White House asked the Pentagon to draw up options for strikes against Iran before the US midterm elections, citing unnamed officials who said the size and targets were still being debated. This raised concerns about further escalation in the conflict with Iran, which has already lasted eight months.
How it is being reported
- Oil prices surge on worries of shipping attacks and Gulf of Mexico hurricaneThe price of Brent crude oil increased by about 5% on Thursday to 105 dollars per barrel.Evening Standard · 8 Oct, 13:28
- Oil prices surge on worries of shipping attacks and Gulf of Mexico hurricaneThe price of Brent crude oil increased by about 5% on Thursday to 105 dollars per barrel.Independent Business · 8 Oct, 13:28
- Oil prices rise sharply on Middle East tensions and US hurricane threatGlobal bond market sell-off continues and stocks fall amid another wave of potential strikes against Iran Business live – latest updates Oil prices have risen sharply amid fears about escalating tensions in the Middle East and a squeeze on production from the threat of a hurricane off the US coast. Brent crude, the international benchmark, rose by 3.8% to $104 a barrel on Thursday, triggering a wave of selling in the global bond and stock markets. Continue reading...The Guardian · 8 Oct, 09:44
- Oil prices climb amid supply fears and shipping attacks; prospect of rate rise weighs on UK housing market – business liveBrent crude heads towards $103 a barrel while Asian shares slide Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy. Oil prices have risen towards $103 a barrel on worries about crude supplies from the Middle East amid growing attacks on shipping in the Gulf and the strait of Hormuz, while the US has reduced its output as a hurricane threatened offshore production. A renewed rise in interest rate expectations has created a fresh headwind for the housing market, with buyers becoming a little more cautious and sales activity losing some…Guardian Business · 8 Oct, 07:51
In this story: Brent crude · Shell · Chevron · Strait of Hormuz · Gulf of Mexico · Middle East · Qatar · Iran
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