[Global Oil Prices] Crude tops $117 intraday ... next April contract also breaks $100

[Financial News]  

Global oil prices topped $117 a barrel on the 23rd (local time), surging to their highest level in six months, their highest since April.
Brent crude for December delivery, a benchmark for international oil prices, surged 3.8% from the previous day's close to $117.45 a barrel intraday. It was the first time prices had broken above $117 a barrel since April.
West Texas Intermediate (WTI), the U.S. oil benchmark, also surged more than 3%, climbing as high as $103.30 a barrel intraday for December delivery.
Oil's rally accelerated amid reports that U.S. President Donald Trump is planning renewed strikes on Iran.

Brent crude has surged more than 10% this month alone, according to the Financial Times (FT).
Analysts cite two factors behind the sharp rise in oil prices. The first is concern that the United States and Israel will intensify their attacks on Iran after the midterm elections on November 3. Rising tensions in the Strait of Hormuz and the Bab el-Mandeb Strait, two vital oil shipping routes, could make disruptions to oil supplies inevitable.
In addition, concerns are growing that oil inventories are now inadequate, as major countries have released strategic petroleum reserves (SPR) since the Iran war began on February 28. In other words, the buffer against supply shocks is getting thinner.
Iran is already intensifying attacks on oil tankers in the Strait of Hormuz to squeeze oil supplies, the Achilles' heel of the global economy. Iranian state television claimed on the 22nd that seven tankers had been attacked or damaged by mines.

With the threat of war looming, the United States evacuated some of its diplomats from Saudi Arabia.
Helima Croft, a prominent oil analyst and global head of commodity strategy at RBC Capital Markets, said, “Oil prices will continue to rise as the risk of military operations in the Middle East escalates.” She added, “With missiles flying back and forth, it has become absurd to say the war will be ‘over soon.’”
Bob McNally, president of energy consulting firm Rapidan Energy, warned that Brent crude could quickly hit $150 a barrel “if the conflict escalates into a situation where mutual deterrence fails and critical oil infrastructure suffers widespread damage.”
This is a criticism of President Trump's remarks that day. Trump told reporters that the United States could “end the war very quickly” and that “Iran is a failed country, so we will take as much oil as we want.”
Trump made those remarks after Mike Waltz, the U.S. ambassador to the United Nations, told the FT that the lull with Iran could last another year.
An executive at a major commodities brokerage said the market had previously “not even considered” an escalation of the Iran war, but was now pricing it in. He added that the prevailing view was that renewed U.S. and Israeli airstrikes on Iran were only a matter of when—before or after the midterm elections.

With expectations that the Iran war will not end anytime soon, the market is betting that high oil prices could last longer than expected.
Oil futures for delivery months from now are surging.
Brent crude for delivery next April topped $100 a barrel on the 23rd.
Oil supplies are increasing as the blockade of the Strait of Hormuz eases compared with the start of the war, but prices are rising.
According to maritime intelligence firm Kpler, oil exports from Gulf producers other than Iran even exceeded prewar levels last week. However, data from other ship-tracking firms still show exports below prewar levels.
Concerns are also growing that attacks on oil infrastructure by Iran and the pro-Iran Houthi rebels in Yemen will disrupt supplies.
Ole Hansen, head of commodity strategy at Saxo Bank, said, “The market is increasingly concerned that further attacks will damage crude production, refining and export infrastructure, triggering supply disruptions that cannot easily be resolved by rerouting shipping.”

Gulf oil producers are racing to export as much as they can while they still can, but the number of tankers available is limited, making a slowdown in export rates inevitable soon.
Moreover, if full-scale war with Iran resumes, prices of refined products such as gasoline, diesel and jet fuel will soar, along with crude oil prices.
Warnings have emerged that diesel, which has already surged to around $200 a barrel, could rise to at least $250. Industry observers expect the extent of the increase to depend on the damage to oil infrastructure.
This will fuel inflation (rising prices).
Bill Campbell, a portfolio manager at DoubleLine, predicted, “Inflation will remain slow to come down.”
[email protected] Song Kyung-jae Reporter