Commodity

International oil prices surged on Thursday as traders weighed rising shipping risks in the Persian Gulf and mounting U.S.-Iran tensions, alongside the potential impact of Hurricane Isaias on U.S. energy infrastructure. Brent crude futures climbed 4.5% to $104.73 a barrel. WTI crude futures rose 4.4% to $91.41 a barrel.

Italy has fully met its obligations under the International Energy Agency's emergency oil stock release plan and remains open to providing additional supplies, provided other European nations...

Chevron CEO Mike Wirth said physical crude shipped to Asia is approaching $150 a barrel, far above the $105 shown on screens. He said rising shipping risks and shrinking supply buffers are distorting the oil market. That has opened a pronounced gap between physical prices and futures prices.

Escalating tanker attacks in the Middle East and the approach of Storm Isaias toward the Gulf of Mexico have constrained U.S. crude output, lifting Brent above $104 a barrel. Higher energy costs have driven bond yields higher, with the 30-year government bond yield rising to 6.0117%. Global stock markets have come under pressure and moved lower.

Brent crude surged above $102 per barrel after reports said the Trump administration instructed the Pentagon to develop strike options against Iran that could be carried out before the midterm elections. Rising geopolitical tensions in the Middle East intensified fears of oil supply disruptions.

Brent crude rebounded above $101 a barrel on Wednesday after a rise in attacks near the Strait of Hormuz and as a storm threatened the U.S. Gulf Coast. West Texas Intermediate crude hovered close to $90 a barrel. Average gasoline prices hit $4.36 per gallon versus $3.12 a year ago, while diesel averaged $6.30 per gallon.

Executives at a London forum said the volume of oil inventories that can be tapped by the global market is shrinking, with more than 1 billion barrels released since the Middle East crisis and only 10% or less of the buffer remaining. The International Energy Agency is preparing a new release of 100 million barrels, but part of its record 400 million-barrel release has yet to fully reach the market. The combination is highlighting tighter supply conditions and making the market more fragile.

Signs of improving Middle East oil supply weighed on crude prices. Kuwait said output has reached 75% of prewar levels, and Saudi Arabia cut its official selling price for November Arab Light cargoes into Asia. Against that backdrop, Brent crude fell to $100.07 a barrel and WTI futures dropped to $88.92. Gold edged higher, with New York futures up 0.2% to $4,164.50 an ounce, as investors watched U.S. Treasury yields and the dollar.

Intercontinental Exchange (ICE), the owner of the New York Stock Exchange, has launched gold, silver, platinum and palladium futures contracts in London to build a local derivatives market in the world’s largest physical gold hub. London handles more than $180 billion a day in over-the-counter gold trading. Gold held in London vaults totaled 9,632 metric tons at the end of August, valued at about $1.4 trillion, according to the London Bullion Market Association. The move follows the London Metal Exchange’s closure of its gold futures contract in 2022 due to low trading activity, leaving New York as the dominant center for exchange-traded gold derivatives.

G7 members agreed last week to release 100 million barrels of oil and fuel reserves as conflicts in the Middle East and Ukraine squeezed supplies. UK retail diesel prices have recently risen above £2 per litre for the first time. Economists said the move could lower pump prices by around 6p a litre, saving about £3.3 on a 55-litre fill-up. They added it could shave roughly two to three basis points off near-term inflation.