Brent crude touches $110 as Middle East supply concerns persist

Brent crude touched $US110 a barrel on Friday 16 October for the first time since May, Reuters reported, as traders weighed the risk of further supply disruption in the Middle East.

Brent futures settled $3.94, or 3.7%, higher at $109.86, the highest close since 19 May. US West Texas Intermediate rose $3.44, or 3.5%, to $101.41. Over the week, Brent gained 4.9% and WTI 10.4%, according to Reuters.

Consultancy Energy Aspects said prices reversed earlier losses “amid rumours of attacks on Saudi energy infrastructure”. A Saudi-led coalition said it intercepted a ballistic missile fired towards the Red Sea port of Yanbu. Consultants Rapidan Energy Group said initial reports showed no damage.

Not every analyst sees a shortage. “We are not running out of oil, as flows out of the Middle East have largely recovered,” Norbert Rucker of Swiss bank Julius Baer told The National.

Governments have moved to add supply. The International Energy Agency agreed on Thursday to release more than 20 million barrels of fuel. The US Energy Department said it had requested proposals for an exchange of up to 17 million barrels from the Strategic Petroleum Reserve.

The IEA said wholesale diesel prices topped $200 a barrel in Singapore and reached about $220 in Europe and the US, The National reported. The agency has warned that the global diesel shortage is likely to last well into next year.