Oil prices advanced on Tuesday, with Brent hovering around a five-month high as traders priced in a geopolitical risk premium from Houthi attacks on Saudi infrastructure and reports of vessel attacks in the Gulf.
Brent crude futures climbed 55 cents, or 0.50%, to $110.10 a barrel, after rising as high as $110.70 a barrel in the previous session to their highest since May 20.
The United States West Texas Intermediate crude contract for November delivery, set to expire on Tuesday, was up 0.24% to $103.91. The more active December contract rose 39 cents, or 0.40%, to $98.93.
“Oil prices remain well-supported. This suggests the market is pricing in a significant risk premium, given the situation’s volatility,” analysts said in a note on Tuesday.
“However, if flows continue uninhibited despite the geopolitical environment, the risk premium would likely erode slowly. Clearly, there are no signs of this yet.”
At least 18 vessels were reportedly attacked over two weeks, which keeps the risk premium intact, shiptracker Kpler said in a note on Monday.
–Reuters–
