Oil Jumps Over 2% as Saudi Attacks, U.S.-Iran Tensions Keep Risk Premium Elevated

Crude prices climbed more than 2% Thursday, with Brent settling above $111 a barrel, as traders weighed fresh strikes on Saudi energy infrastructure and the risk of renewed U.S.-Iran hostilities against recovering Middle East supplies. December Brent futures rose 2.9% to $111.96 a barrel, while December West Texas Intermediate gained 2.3% to $99.40. Saudi Arabia's Energy Ministry said Wednesday that air defenses intercepted a drone targeting a facility at Saudi Aramco's Shaybah oil field. Falling debris killed two people and injured two others, but operations were unaffected, according to the Saudi Press Agency. MUFG analysts said the attacks have yet to materially affect Saudi production or exports, though targeting of energy facilities is keeping a substantial geopolitical risk premium in crude markets. Shipping risks persisted after U.K. Maritime Trade Operations reported a tanker struck by an unidentified projectile near Oman, causing a fire; the crew was reported safe. Middle East crude exports have recovered, averaging more than 24 million barrels a day in the week through Oct. 18, above the prewar level of 23.3 million barrels a day, according to Kpler. U.S. commercial crude inventories fell by 3.1 million barrels to 412.5 million barrels last week, the Energy Information Administration said Wednesday.