Brent oil topped $100 a barrel for the first time since July, as attacks between the US and Iran and a recovery in Chinese oil buying propel the global crude benchmark higher.
“The fundamental picture for products remains bullish with global inventories and reserves deteriorating. In the typical pattern, the US and Iran continue their counterattacks and warnings. Despite the ongoing flow of tankers with their transponders switched off, vessels face a persistent threat of attack.
Futures rose as much as 2.3% in London, before paring some of that gain.
In the latest flare up in the Iran war, the US military destroyed five Iranian tankers in response to attempts to hit a US Navy warship with ballistic missiles overnight, Central Command said. “The path of least resistance is a strong and steady grind higher as the war enters seven months,” said Darrell Fletcher, managing director for commodities at Bannockburn Capital Markets. Kuwait Petroleum Corp. is sending tankers through the strait “whenever it is safe,” an official said on Wednesday. “Anxiety over continued and damaging supply disruption, due to the escalation of the conflict between the US and Iran, is significantly higher,” said Tamas Varga an analyst at brokerage PVM. “Inflationary pressure will affect oil demand, but for now supply is not able to match demand.”
