Oil Surges Above $100 Amid Strait of Hormuz Tensions
Oil prices surged above $100 per barrel on Thursday due to escalating attacks on shipping near the Strait of Hormuz, which raised concerns over supply disruptions. The price increase also weighed on gold and Bitcoin, with Brent crude futures rising 5.9% to $107.18 a barrel, while US West Texas Intermediate crude gained 6.25% to $102.05.
The Strait of Hormuz has seen increased attacks since the Iran war began, with Iran stating it attacked 10 ships near the strait on Wednesday after the US hit five Iranian oil tankers. Shipping through the strait remains restricted, and recent events have added to concerns over Red Sea traffic, according to Simon-Peter Massabni, head of business development at XS.com.
Oil demand from China has also increased in recent weeks, contributing to the price surge. The US producer-price data showed a 0.4% increase in August, with energy prices being the biggest contributor to the headline increase.
The data comes ahead of the Federal Reserve's policy meeting next week and has increased expectations for a rate hike. However, economists polled by Reuters expect the Fed to hold rates steady.