Oil Surges Above $100 as Shipping Attacks Escalate
Oil prices have surged above $100 a barrel as escalating attacks on shipping near the Strait of Hormuz raised concerns over further supply disruptions. The latest rally followed an increase in attacks on shipping since the Iran war began, with Iran saying it attacked 10 ships near the Strait of Hormuz on Wednesday after the US hit five Iranian oil tankers.
The restricted shipping through the Strait of Hormuz and attacks from Yemen on Saudi energy facilities have broadened the market risk beyond the Strait of Hormuz, according to Simon-Peter Massabni, head of business development at XS.com. Brent crude futures rose 5.9% to $107.18 a barrel, while US West Texas Intermediate crude gained 6.25% to $102.05.
The surge in oil prices has also weighed on gold and Bitcoin, with spot gold declining 1.8% to $4,320 an ounce due to higher oil prices and stronger US inflation data increasing expectations of a Federal Reserve rate hike. The US Producer Price Index showed final-demand prices rose 0.4% in August, following an upwardly revised 0.1% gain in July.