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Oil
Source: Newsmaker.id
Oil prices strengthened again during Wednesday’s trading session (October 21). Brent crude reached US$110.39 per barrel, while WTI hit US$100.92 per barrel, as the market began to factor in renewed risks of supply disruptions from the Middle East. This movement indicates that the geopolitical risk premium remains significant, despite earlier hopes for progress in US-Iran diplomacy.
Supply concerns have intensified as risks to shipping lanes around the Strait of Hormuz and the Red Sea have once again come to the fore. Recent reports indicate that at least 18 vessels have been attacked over the past two weeks, while threats to Saudi Arabia’s energy infrastructure have further heightened market anxiety.
This situation has rendered the oil market highly sensitive to any developments in the conflict. Attacks by the Iran-aligned Houthi group on various facilities in Saudi Arabia have also fueled concerns regarding the security of regional energy infrastructure, although some claims of such attacks have yet to be independently verified.
On the other hand, diplomatic efforts between the US and Iran remain a potential factor that could cap price gains. While a meeting between Iranian and Pakistani officials had briefly raised hopes for a path toward negotiation, subsequent reports dampened expectations for an imminent agreement. Consequently, investors find it difficult to overlook the risks of supply disruptions.
Supply-side pressure has been further compounded by a decline in US crude oil inventories. Data from the American Petroleum Institute shows that US crude stocks fell by approximately 4.9 million barrels for the week ending October 16, providing additional support for oil prices amid tight conditions in the energy market.
Newsmaker Analysis: Oil market fundamentals remain bullish but highly volatile. As long as attacks on vessels and energy infrastructure persist, the risk premium is likely to keep Brent prices above US$110. However, any tangible progress toward a U.S.-Iran agreement or a restoration of supply flows could quickly erode that premium and trigger a price correction. (asd)
Source: Newsmaker.id