Crude Surges Past $115 as Saudi Refinery Strike Stokes Supply Fears
Crude oil prices jumped on Wednesday, with Brent moving decisively above $115 a barrel as concerns over global supply intensified after a reported attack on a Saudi refinery.
The Houthi movement, based in Yemen and supported by Iran, has said it fired a missile at one of Saudi Arabia's biggest refineries. Saudi authorities have yet to officially acknowledge the strike, but the report alone was enough to unsettle energy traders.
Brent crude for December settlement added $1.55, a gain of 1.36 percent, to hit $115.43 per barrel. WTI crude advanced 1.43 percent to $101.32 per barrel.
The targeted facility has a daily processing capacity of roughly 550,000 barrels. The uncertainty surrounding the incident has kept markets nervous, reversing the modest declines seen in the previous session.
That session had seen crude slide nearly $2 a barrel on hopes that diplomacy in the Middle East could calm regional tensions, along with expectations of higher US crude inventories.
Recent talks in Tehran brought together officials from Saudi Arabia, Turkey, Pakistan and Iran to discuss easing regional strains. According to reports, all parties agreed to keep dialogue open on peace and security issues.
All eyes are now on the OPEC+ gathering set for Sunday. Analysts broadly expect December output targets to stay as they are. Saudi Arabia, Russia and Iraq continue to produce below their targets.
Saudi Arabia ranks as the world's second-largest oil producer and the largest exporter, which means any hint of supply strain there resonates across global energy markets.
The Strait of Hormuz, a critical artery that handled about 20 percent of global energy shipments before the conflict, is still under pressure. Brent had already topped $117 a barrel last week after tankers near the strait came under attack, reaching its highest level since April, and it briefly touched $117 on Monday.
Technical analysts note that WTI found support at $99 to $100 on Tuesday, which triggered renewed buying. Resistance is seen at $103 to $104, then $106 to $107 and $108. Should prices dip below the main support, $96 to $97 would be the next key level.
Experts believe the near-term direction of oil will hinge on the balance between diplomatic progress and fears of supply interruptions. A worsening geopolitical situation could push prices higher, while improvement in the region could provide some respite to the market.