★ Experts say oil market may not return to calm soon
★ Trump says prices will plummet after this important election on November 3rd and the war will be over very shortly after the election.
Oil prices surged again on Thursday, with Brent crude hitting $108 per barrel for the first time since May, as traders brace for a more prolonged supply shoRead more…ck caused by the Iran war.
Oil prices have climbed back above the $100 per barrel mark this week as fighting in the Straight of Hormuz and Red Sea has intensified. The US and Iran have traded strikes, while the Iran-backed Houthis have attacked Saudi Arabia and ignited tensions in the Bab al-Mandab Strait.
Brent crude, the global oil benchmark, rose as much as 7.1% and hit $108 per barrel before settling at $107.63, up 6.34% on the day. It was Brent’s highest settle level since May 19 and its biggest one-day jump in six weeks.
US crude rose as much as 7.3% and hit $103 per barrel for the first time since May before pulling back slightly and settling at $102.48, up 6.69% on the day. It was US crude’s highest settle level since May 19 and its biggest one-day jump in two months.
Resurgent conflict has stoked concerns of further disruptions to global oil supplies and the flow of crude through the Strait of Hormuz.
“The step up in attacks in the Strait of Hormuz and by the Houthis against Saudi Arabia suggests that Iran and its proxies are trying to regain the initiative in the war,” Jason Tuvey, deputy chief emerging markets economist at Capital Economics, said in a note.
“This could set back the recovery in oil output in the Gulf and raises the risk that global energy prices rise even further in the coming weeks,” Tuvey said.
For the first time since the war started, S&P Global Energy said Thursday it does not expect Middle East oil production to return to pre-war levels by the end of next year. The firm no longer assumes a definitive end to the war nor a return to normal in the Strait of Hormuz by the end of 2027.
S&P now expects oil prices to stay high – in the $80 to $100 a barrel range – through next year.
By contrast, President Donald Trump on Wednesday night promised a speedy return of cheap energy.
“Prices right after this very important election on November 3rd will be plummeting,” Trump said. “The war will be over very shortly after the election.”
Jim Burkhard, global head of crude oil research at S&P Global Energy, said the market is “not returning to calm.”
“It is adjusting to the new normal defined by unresolved conflict and persistent Maritime risk,” Burkhard said in the report.
CNN
