57 minutes ago
Crude oil prices are holding on to overnight gains in early Asian trading on Friday, October 23, amidst rising Houthi attacks on Saudi Arabia, even as prices of Physical Barrels of crude are on a downtrend.
Brent Crude closed above the mark of $113 overnight, while West Texas Intermediate or US crude (WTI) is trading near the mark of $99 a barrel, having surged over 2.4% the previous day.
Houthis claimed responsibility for the recent attacks on the Aramco port of Yanbu, the Shaybah oil field and the King Fahd airport in the eastern region.
US President Donald Trump also told reporters on Thursday that the US has "knocked out Iran", and also threatened to go "a little bit further", without sharing further details. A New York Times report cites sources and states that the US and Israel have developed plans for renewed strikes against Iran after the midterm elections end on November 3.
Saudi Aramco has also evacuated its headquarters in Dhahran and asked its staff to work from home, according to reports, without citing the reasons behind this announcement.
Oil flows through the Strait of Hormuz are recovering towards pre-war levels, but so are the attacks on the oil and commercial tankers passing through the region. Shipments of oil products remain constrained, leading to prices of products such as Diesel hitting record highs in the US, prompting Trump to sign a deal with Russia for the supply of diesel, and waiving of sanctions for a 60-day period as well.
Russia's Interfax reported on Thursday citing the government that gasoline and diesel production is rising in the domestic market and fuel inventories are also being replenished. Attacks by Ukraine on Russia's energy infrastructure has also threatened to escalate supply fears, thereby driving prices higher as well.
Even as futures prices are rising, the prices of "Dated Brent", or physical crude barrels are down nearly $15 in the last two weeks towards the $120 a barrel mark. Similar West Asian benchmarks have also declined. Resumption of supplies through the Persian Gulf and shipping rates cooling off are some of the factors dragging prices lower.
Analysts believe that if supplies are sustained and freight rates keep sliding, oil futures could be in for a fall in the coming weeks, but warned that there are still plenty of headline risks at play.
