Brent stays near $110 as Houthi attacks on Saudi Arabia fuel supply fears
In short
Brent crude traded around $110 a barrel from 20 to 22 October, near a five-month high, as Houthi attacks on Saudi targets and reported attacks on vessels in the Gulf raised supply concerns. The National reported a drone attack near Saudi Aramco's Shaybah oilfield on Wednesday in which two people were killed, with operations unaffected.
Read the full story 2 min read
Brent crude hovered around $110 a barrel across 20, 21 and 22 October. Economy Middle East said Brent futures were at $109.9 at 5:03 GMT on Tuesday after reaching $110.70 in the previous session, the highest level since 20 May. The National reported a five-month high on Tuesday, with Brent at $111.30 at 2.27pm UAE time, up 1.52 per cent, and WTI at $100.80, up 2.30 per cent. [ 1 , 2 ]
The outlets linked the prices to Houthi attacks and risks to shipping. Economy Middle East said the Houthi group claimed on Monday several attacks on Saudi energy, airport and military targets, including an Aramco facility in Yanbu, the Shaybah oilfield, King Khalid International Airport in Riyadh and Abha airport, and that Saudi authorities did not immediately confirm the claims. The National reported that the Houthis claimed six attacks on the kingdom and that the claims brought down stock markets in the Gulf. Kpler said at least 18 vessels had reportedly been attacked over the past two weeks. [ 1 , 2 ]
On Wednesday 21 October WAM, citing Reuters, said Brent rose by $1.21 to $110 a barrel and WTI rose by more than a dollar to $99. Economy Middle East put Brent at $110.2 at 5:05 GMT, up $1.38, and said a decline in US crude inventories added support. [ 3 , 5 ]
On Thursday The National reported Brent up 1.7 per cent, or $1.81, at $110.63 at 7.36am UAE time, and WTI up 1.4 per cent at $98.52. It said a Houthi drone attack near Saudi Aramco's Shaybah oilfield heightened supply concerns. The Saudi Energy Ministry said two people were killed and two injured on Wednesday when debris from a drone intercepted by Saudi air defences fell near a processing plant at Shaybah, striking a contractor's vehicle and causing a fire. Operations were unaffected. [ 7 ]
The National added that Saudi Arabia's civil aviation authority reported an attack on King Fahd International Airport in Dammam that killed one person and injured eight. The Houthis had not commented on it. Economy Middle East reported that a larger-than-expected decline in US crude inventories also supported prices on Thursday, with shipping risks and threats to energy infrastructure keeping them elevated. [ 6 , 7 ]
The National said the International Energy Agency had agreed to release more than 20 million barrels of diesel, and that Gulf producers had pushed tanker transfers as far as India's coast and cut prices to keep crude flowing to Asia. It said higher energy prices were nudging inflation up and raising the probability of another US Federal Reserve rate increase at next week's meeting, with analysts expecting a second straight raise. [ 2 ]
Why it matters
The outlets link the price level to supply worries from the Middle East and to inflation, with The National saying higher inflation raises the chance of another US Federal Reserve rate increase at its meeting next week. Gulf stock markets fell after the Houthi claims, according to The National.
Key facts
- Brent crude futures reached $110.70 in the session before 20 October, the highest since 20 May, and were at $109.9 a barrel at 5:03 GMT on Tuesday. [ 1 ]
- On Tuesday The National put Brent at $111.30, up 1.52 per cent, at 2.27pm UAE time, and WTI at $100.80, up 2.30 per cent. [ 2 ]
- On Wednesday 21 October WAM, citing Reuters, reported Brent up $1.21 at $110 a barrel and WTI above $99; Economy Middle East had Brent at $110.2 at 5:05 GMT. [ 3 , 5 ]
- On Thursday The National reported Brent up $1.81, or 1.7 per cent, at $110.63 as of 7.36am UAE time, and WTI up $1.37 at $98.52. [ 7 ]
- Ship-tracking firm Kpler said at least 18 vessels had reportedly been attacked over the past two weeks. [ 1 ]
- Saudi Arabia's Energy Ministry said two people were killed and two injured on Wednesday when debris from a drone intercepted by Saudi air defences fell near a processing plant at Shaybah; operations were unaffected. [ 7 ]
- Saudi Arabia's civil aviation authority said an attack on King Fahd International Airport in Dammam killed one person and injured eight. [ 7 ]
- Economy Middle East reported that a fall in US crude inventories supported prices, describing it as larger than expected on Thursday. [ 5 , 6 ]
Confirmed by several sources
Still unclear
- Whether the Houthi claims of strikes on Saudi energy, airport and military targets on Monday are accurate. Economy Middle East said Saudi authorities did not immediately confirm the claims; The National reported them as claims.
- Responsibility for the attack on Dammam airport. The National said the Houthis had not commented on it.
- The WTI level on 20 October. Economy Middle East gave $103.91 for the November contract and $98.75 for the December contract, while The National gave $100.80 without naming the contract.
- Brent price quoted by Aletihad. The Aletihad page lists Brent at 135.08, which differs from the roughly $110 given by every other document, including its own headline.
- Saudi Arabia's Energy Ministry said two people were killed and two injured by debris from an intercepted drone near the Shaybah processing plant, and that operations were unaffected. Reported by a single source so far
- A fall in US crude inventories provided additional support to prices on 21 and 22 October. Reported by a single source so far
What local media are saying
Timeline, local time
- 20 October: Economy Middle East reports Brent near $109.9 after $110.70 the previous session, with Houthi claims of attacks on Saudi targets. [ 1 ]
- 20 October: The National has Brent at $111.30, up 1.52 per cent. [ 2 ]
- 21 October: WAM reports Brent up $1.21 to $110 a barrel, citing Reuters. [ 3 ]
- 22 October: Brent at $110.63, up 1.7 per cent, per The National. [ 7 ]