Oil prices rose on Friday, with Brent approaching $118 a barrel, the highest level since April, as signals that the United States may resume military strikes on Iran lifted the market. Bloomberg reported the move on Friday, 30 October. Senior US military commanders briefed President Donald Trump on military options on Thursday, the Wall Street Journal reported.
Brent spot in Europe closed at $123.10 a barrel on 27 October, according to our own market data, a physical benchmark that differs from the futures price most news reports quote. WTI traded in a range around $105 a barrel.
Supply and inventories tighten
Brent has risen 14 percent during October, even as flows through the Strait of Hormuz began to recover. Low inventories and tight refined product supply are also supporting prices. Ukrainian strikes on Russian refineries have added to the squeeze.
A tanker was hit by an unidentified projectile after leaving the Strait of Hormuz on Thursday, according to UK Maritime Trade Operations. Average diesel prices have risen about 80 percent so far this year.
Diplomacy and the midterms
Iran confirmed it had received a letter from US Vice President JD Vance, which the Wall Street Journal described as an attempt to revive peace talks. Iran’s chief negotiator, Mohammad Bagher Ghalibaf, said the Islamic Republic would not change or sacrifice its position in efforts to end the war.
Naohiro Niimura, a partner at Market Risk Advisory Co., said traders would struggle to keep short positions for long without an official ceasefire between Washington and Tehran, even if physical flows recover. The US midterm elections are on 3 November.
Related: Brent tops $114 a barrel on renewed US-Iran fears
Source: UK Maritime Trade Operations | Data: FRED — St. Louis Fed
