Oil Prices Climb on Storm and Middle East Supply Fears

Oil prices climbed on Wednesday as concerns over supply disruptions intensified due to an approaching storm in the US Gulf of Mexico and escalating attacks on Saudi Arabian facilities. Brent futures gained 93 cents, or 0.92%, to reach $101.51 a barrel, while US West Texas Intermediate (WTI) crude rose 82 cents, or 0.92%, to $90.25.

Forecasters warned that a storm forming in the Gulf of Mexico could become the first Atlantic hurricane of 2026 within two days, threatening oil and gas production. The affected offshore areas contribute 15% of US crude oil and 5% of natural gas output. KCM Trade chief analyst Tim Waterer described the storm as an "unwelcome complication" that could disrupt production and refining at a time when supply issues are already mounting.

Meanwhile, attacks by Yemen's Iran-backed Houthis on Saudi airports in Jazan and Najran added to supply fears. The Saudi aviation authority reported two attacks on Monday, coinciding with a major offensive by Saudi-backed Yemeni forces against the Houthis. Mukesh Sahdev, chief oil analyst at X Analysts, predicted that these disruptions would keep prices elevated near $100 a barrel without significant de-escalation.

Supply concerns were further exacerbated by falling US crude oil and gasoline inventories, while distillate stocks saw a slight increase. Despite rising supplies from the East-West pipeline, tensions in the Middle East and potential production outages in the US Gulf kept market sentiment cautious.