Oil jumps over 5% as Middle East supply concerns persist amid shipping attacks

Oil prices climbed more than 5 per cent on Thursday as supply worries in the Middle East persisted, with tanker and shipping attacks in the Gulf and near the Strait of Hormuz rising. Brent crude futures rose $5, or 4.99 per cent, to $105.20 a barrel by 1041 GMT, their highest level since September 29. US West Texas Intermediate crude gained 5.06 per cent to $92.75, its strongest since October 2, according to Business Recorder.

IG analyst Chris Beauchamp linked the rise to an approaching US storm and to an Axios claim that Washington was getting ready to restart large-scale fighting against Iran. Shell and Chevron scaled back work at offshore sites in the Gulf while Hurricane Isaias closed in, and by Wednesday US Gulf of Mexico producers had shut in roughly 25.08 per cent of current oil output. Reuters could not independently confirm the Axios report.

Crude had eased on Wednesday once the International Energy Agency moved to bring forward oil stock releases and favour diesel shipments. Tanker attacks in the strait last week were the most frequent since the war began, while Gulf producers ramped up shipments. MST Marquee's head of energy, Saul Kavonic, said attacks were likely to intensify and keep prices elevated. Inventory data showed US crude reserves dropped by more than expected, with diesel stocks easing slightly.