December Brent crude futures climbed 1% to $101.54 per barrel, while December WTI crude futures also rose 1% to $89.31 per barrel. The U.S. Energy Information Administration raised its fourth-quarter Brent crude average price forecast to $105 per barrel, an increase of $14 from its previous projection.
Traders are weighing a fresh round of Houthi attacks on Saudi Arabia and storm-related oil and gas shutdowns in the U.S. Gulf of Mexico on one hand, while observing that Middle East crude supply is recovering on the other. Driven by the interplay of these multiple factors, oil prices moved higher on Wednesday. December Brent crude futures rose 1% to $101.54 per barrel, and December West Texas Intermediate (WTI) futures rose 1% to $89.31 per barrel.
Saudi Arabia's General Civil Aviation Authority said Tuesday that Jizan's King Abdullah International Airport and Najran International Airport were attacked and damaged, with three people injured in the strikes. According to Turki Al-Maliki, spokesman for the Saudi-led coalition, a Houthi missile targeting an area north of Riyadh was intercepted and destroyed early Wednesday. Yemen's Aden International Airport was also attacked, with authorities saying two Houthi missiles struck the civilian facility without causing casualties. According to the Saudi Press Agency, the Saudi-led coalition separately reported Tuesday that it destroyed a ballistic missile launch platform in Sanaa and a storage facility in the Saada mountainous region holding 20 ballistic missiles.
Shipping risks around the Strait of Hormuz remain elevated. India's Ministry of External Affairs said a Panama-flagged commercial vessel, "MT On Peace," was attacked on Tuesday, injuring 12 sailors on board, 11 of whom were Indian nationals.
Beyond the Middle East, a developing storm has also forced some crude production in the U.S. Gulf of Mexico to shut in. The U.S. Bureau of Ocean Energy Management said that as of Tuesday morning, 185,120 barrels per day of offshore crude production had been shut in as companies took precautions against the storm, accounting for 9.2% of total Gulf of Mexico output. At that time, no personnel evacuations had been carried out on any production platforms or drilling rigs.
Even so, regional crude supply continues to recover. The U.S. Energy Information Administration (EIA) said Tuesday that despite ongoing attacks, Middle East crude exports in September rebounded from August. Crude production shut in due to attacks fell from an average of 5.8 million barrels per day in August to 4.8 million barrels per day, compared with a peak of 10.9 million barrels per day in May. The U.S. EIA raised its fourth-quarter Brent crude average price forecast to $105 per barrel, an increase of $14 from its previous expectation. The EIA said restricted Middle East exports, high transportation costs, and continued inventory drawdowns will support oil prices at elevated levels. Institutional estimates show that global crude inventories fell by an average of 1.9 million barrels per day in the third quarter, and inventories are expected to continue declining at a rate of 700,000 barrels per day this quarter.
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