Brent crude is approaching 118 dollars a barrel, putting oil prices on track for a hefty 13 to 14 percent month on month increase, OilPrice.com reported on Friday, as fears of renewed United States and Iran hostilities intensify. The site market tables put the Brent close at 117.64 dollars, up 2.4 percent on the day, with WTI crude at 104.12 dollars, up 2.08 percent.
Qatari and Pakistani mediation notwithstanding, OilPrice.com said everything is pointing towards a resumption in hostilities in the coming weeks: rising numbers of Hormuz attacks, reported explosions at Iran’s Jask port, reports of military repositioning and extremely bullish positioning by commodity trading advisers. Markets, it said, should brace for extremely volatile trading sessions next week.
The same weekly round carried the physical backdrop. Iran’s Islamic Revolutionary Guard Corps said three unidentified vessels struck naval mines, caught fire and were abandoned after using an unauthorised route, while United States Central Command disputes claims that the strait’s main shipping lane has been mined. Separately, a tanker was hit by limpet mines in the strait on Thursday, the first successful use of such explosives in the waterway since February.
Refining remains the profit engine of the move. OilPrice.com noted that ExxonMobil and Chevron both beat expectations for third quarter profits, cashing in 15.4 billion dollars and 9.9 billion dollars respectively, with Exxon earning more from downstream than upstream for the first time in six years. Those earnings were published in full in yesterday’s edition and are not duplicated here.
For the week ahead, the calendar is political as much as physical: the United States midterm elections on November 3, the OPEC+ meeting on November 1, and any Saudi or Iranian statement on Hormuz transits will set whether the premium at 117 to 118 dollars extends or breaks.