Crude pushes past $100.50 as Houthi strike hits Saudi refinery
WTI crude rose toward $100.75 on Wednesday after Yemen's Houthi forces claimed a missile attack on Saudi Arabia's Ras Tanura refinery, rekindling worries about oil supply disruption.
According to Reuters, the Iran-backed Houthi movement fired a ballistic missile at Ras Tanura on Tuesday, targeting Saudi Arabia’s biggest refining facility. As one of the world’s leading crude exporters, Saudi Arabia’s infrastructure carries outsized weight for global markets, and any perceived threat to it typically injects a geopolitical risk premium into oil prices.
Commodity strategists at ING noted that the market is still pricing in a greater likelihood of re-escalation, with attention fixed on how US President Donald Trump might respond to Iran going forward.
On the inventory front, the American Petroleum Institute reported a decline of 2.031 million barrels in US crude stocks for the week ending October 23, a softer draw than the previous week’s 4.93 million barrel reduction. Attention now turns to the Energy Information Administration’s official figures, due later Wednesday, which could sway prices depending on whether the result surprises to either side of expectations.
TD Securities analysts argued that crude is poised to keep leaning higher over the coming period, citing heightened tension linked to upcoming elections in Israel and the United States, along with a growing risk premium stemming from recent Houthi attacks and tanker incidents that have squeezed some traffic through the Strait of Hormuz. The firm cautioned, however, that mounting shipping costs could eventually limit further gains if squeezed refining margins force processors to scale back operations.
The development is significant for energy markets since renewed instability in the Middle East combined with a weekly stock drawdown tends to lift both WTI and Brent benchmarks, with ripple effects on fuel prices and currencies tied to oil-producing economies.
Source: FXStreet