Storm and Saudi Attacks Push Oil Prices Higher

Oil prices climbed on Wednesday, driven by concerns over potential supply disruptions in the Gulf of Mexico and escalating tensions in Saudi Arabia. Brent futures rose 93 cents, or 0.92%, to $101.51 a barrel, while US West Texas Intermediate (WTI) crude increased by 82 cents, or 0.92%, to $90.25.

A storm forming in the Gulf of Mexico is expected to become the first Atlantic hurricane of 2026 within two days, threatening oil and gas production facilities. The affected offshore areas produce 15% of US crude oil and 5% of the country's natural gas. The storm could disrupt six refineries, which account for about 50% of the national refining capacity.

Adding to supply concerns, Yemen's Iran-backed Houthis targeted Saudi airports in Jazan and Najran on Monday. The attacks occurred amid escalating hostilities between Saudi-backed Yemeni government forces and the Houthis, with Riyadh stepping up airstrikes in support of a major offensive. Analysts suggest these disruptions will keep oil prices elevated near the $100 level without significant de-escalation.

US crude oil and gasoline inventories fell last week, while distillate stocks rose marginally, according to market sources citing data from the American Petroleum Institute. Crude stocks dropped by 2.09 million barrels in the week ended October 2. Despite rising supply from the East-West pipeline, the market remains cautious due to geopolitical tensions and potential production disruptions.