Oil Prices Top $116 a Barrel in Global Markets

Global crude oil prices rose by more than $3 a barrel to a six-month high amid fears of disruptions to energy supplies in the Middle East. Brent crude, the international benchmark, settled at $116.72 a barrel on Friday (October 23). Reports of Houthi attacks in Saudi Arabia and an oil spill off the coast of the United Arab Emirates (UAE) heightened market concerns.

According to Reuters, Brent crude rose $3.55, or 3.14 per cent, to settle at $116.72 a barrel on Friday. This was its highest closing price since April 29. On the same day, US West Texas Intermediate (WTI) crude rose $3.80, or 3.8 per cent, to $103.27 a barrel. Over the week, Brent prices increased by 6 per cent, while WTI gained 2.3 per cent.

Adam Turnquist, chief technical strategist at LPL Financial, said concerns over supply disruptions had intensified following attacks by the Iran-backed Houthi group on several locations in Saudi Arabia, particularly energy infrastructure. The developments have affected international oil markets.

Meanwhile, the UAE’s Ministry of Climate Change and Environment reported an oil spill from a tanker off the coast of Umm Al Quwain. However, the cause of the spill and the identity of the vessel have yet to be confirmed. Shipping sources said an oil tanker named Gem No. 2 was struck by an unidentified object west of the UAE’s Al Jazirah area on October 9.

Several countries have taken steps to release fuel from strategic reserves to maintain supplies. The US Department of Energy has authorised the exchange of up to 400,000 barrels of crude oil from strategic reserves to address supply shortages at a refinery in Louisiana. Germany has also moved to sell diesel, heating oil and crude oil from its strategic reserves.

In addition, Libya’s oil production has declined after a valve on a pipeline transporting oil from two oilfields to the port of Zawiya was shut. Meanwhile, a tanker carrying diesel from Russia is heading towards New York as part of efforts to increase diesel supplies in the United States.

Source: Reuters