Brent crude holds near five-month high on Middle East tension

According to Business Recorder, Brent crude futures gained 55 cents, a rise of 0.50 per cent, to trade at $110.10 a barrel as of 0319 GMT on Tuesday. The contract had reached $110.70 in the previous session, its highest level since May 20, and is now hovering close to a five-month peak. Traders are building a geopolitical risk premium into prices after Houthi strikes on Saudi facilities and reported vessel attacks around the Gulf.

West Texas Intermediate for November delivery, which expires on Tuesday, was up 0.24 per cent at $103.91. The more heavily traded December contract added 39 cents, or 0.40 per cent, to $98.93. ING analysts said the market seems to be factoring in a large risk premium given how volatile the situation is, while Kpler noted that at least 18 vessels had reportedly been hit over a fortnight, which sustains that premium.

Yemen's Houthis said on Monday they had launched several attacks on Saudi energy, airport and military sites, though Saudi authorities had not confirmed the claims. Separately, a Houthi attack on a camp used to train government security personnel in Shabwa province killed 58 people. Trump has yet to finalise a decision on waiving Russia-related sanctions and tariffs, while the IEA said Russian crude output rose 65,000 barrels a day in September.