Supply Threats from Storms and Attacks Drive Oil Prices Higher
Oil prices climbed on Wednesday as concerns over supply disruptions grew due to an approaching storm in the Gulf of Mexico and escalating conflicts in the Middle East. Brent futures gained 93 cents, or 0.92%, to reach $101.51 per barrel, while US West Texas Intermediate (WTI) crude rose 82 cents, or 0.92%, to $90.25.
A storm forecast to become the first Atlantic hurricane of 2026 is expected to hit oil and gas facilities in the Gulf of Mexico. The affected offshore areas produce 15% of US crude oil and 5% of natural gas, potentially causing production and refining disruptions. Six refineries, which account for about 50% of the US's national refining capacity, could be impacted.
Meanwhile, tensions in the Middle East escalated as Yemen’s Houthis attacked Saudi Arabian airports in Jazan and Najran. Saudi-backed forces launched a major offensive against the Houthis, with Riyadh increasing airstrikes in support. Analysts warn that these attacks and refinery outages will keep oil prices elevated near the $100 mark unless there is significant de-escalation.
US crude and gasoline inventories fell last week, while distillate stocks rose slightly, according to market sources citing American Petroleum Institute data. Despite rising supply from the East-West pipeline, geopolitical tensions and weather-related disruptions are expected to keep crude prices high.