Oil Rises as Supply is Threatened by a US Storm and Houthi Airstrikes
SINGAPORE: As the market balanced higher supplies of Middle Eastern crude against supply constraints from a storm headed for US oil-producing regions and strikes by Yemen’s Iran-backed Houthis on Saudi Arabia, oil prices rose on Wednesday.
By 9:35 a.m. Saudi time, Brent futures had increased by 81 cents, or 0.8 percent, to $101.39 per barrel. At $90.05 a barrel, US West Texas Intermediate crude futures increased by 61 cents, or 0.7%.
A storm developing in the Gulf of Mexico is expected to develop into the first Atlantic hurricane of 2026 within two days, according to US forecasters on Tuesday. It is expected to strike oil and gas production facilities.
Approximately 15% of the US’s crude oil and 5% of its natural gas come from the offshore Gulf regions in the storm’s path.
The storm is a “unwelcome complication for crude, raising the prospect of production and refining disruptions at a time when the market already has enough supply-side headaches,” according to Tim Waterer, chief analyst at KCM Trade.
Six refineries could be impacted by the storm. Approximately half of the country’s capacity of 18.2 million barrels per day is produced by refineries in US Gulf states.
According to market sources on Tuesday, US crude oil stockpiles decreased last week, citing data from the American Petroleum Institute. In the week ending October 2, crude stocks decreased by 2.09 million barrels.
According to ING commodity strategists, supply concerns from the Middle East are still quite serious in light of ongoing ship attacks. “For now, the market is likely to remain nervous to any potential supply disruptions.”
The supply has been rebounding. Saudi Arabia’s energy minister, Prince Abdulaziz bin Salman, reported on Tuesday that the country’s East-West pipeline was producing 5.8 million barrels per day.
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