Oil prices surged this week as tensions in the Middle East escalated, with Brent crude crossing $110 a barrel and U.S. West Texas Intermediate reaching about $99. The rise came amid attacks on commercial ships in the Strait of Hormuz, Houthi missile strikes on Saudi Arabia, and Ukraine’s strike on a Russian refinery. U.S. Secretary of State Marco Rubio stated that a peace deal with Iran seems extremely difficult, and Washington will maintain economic pressure on Tehran until attacks on ships cease. Iranian Foreign Minister Abbas Araghchi countered that the Strait would remain closed until the U.S. accepts Tehran’s conditions.
Elon Musk’s comments during SpaceX’s earnings call sent energy stocks higher overnight. Musk highlighted that the real constraint on growing AI superintelligence is power and cooling infrastructure, not semiconductors. He announced plans to add 20 gigawatts of power-cooling infrastructure in 2027, exploring various power sources beyond renewables. Stocks of companies like Bloom Energy, Constellation Energy, and Oklo Inc. saw significant gains following his remarks.
The American Petroleum Institute reported a sharp decrease of 4.930 million barrels in U.S. crude inventories for the week ended October 16. API CEO Mike Sommers noted that U.S. refiners are operating at near-full capacity, delaying maintenance due to rising prices. Meanwhile, U.S. diesel prices hit record levels, climbing to $6.3199, up from $3.6192 a year ago.
Key energy companies are set to report third-quarter earnings this week, including Bloom Energy, NextEra Energy, and Valero Energy. Halliburton Co. already reported its earnings on Tuesday, surpassing market expectations with adjusted earnings per share of $0.60 on revenue of $5.7 billion.