Markets
Brent Crude Jumped 4% to $104 on Tanker Attacks and a Gulf Hurricane
Brent settled at $104.28 on October 8 and WTI at $91.49, after Brent touched $105.91. Energy stocks had their highest close since mid-September, before oil pared gains when President Trump said the US would not attack Iran before the midterms.
Oil had one of its strongest days in weeks on Thursday, October 8. Brent crude futures rose 4.07% to settle at $104.28 a barrel, after trading as high as $105.91. US benchmark West Texas Intermediate gained 3.64% to $91.49. For Brent, it was the biggest one-day gain since September 10 and the highest close since September 28.
Two supply worries hit at once. According to CNBC, Iran stepped up attacks on tankers around the Strait of Hormuz, the narrow channel through which a large share of the world's seaborne oil passes, and Hurricane Isaias forced producers to shut in about 500,000 barrels a day in the US Gulf of Mexico, roughly a quarter of the region's output. Prices came off their highs later in the session after President Trump said the US would not attack Iran before the November midterm elections.
Energy shares followed crude. The Energy Select Sector SPDR (XLE) rose 2.97% to $65.24, its highest close since September 15 and just below that day's $65.93, the fund's best close of the past two years. Occidental Petroleum gained 3.56%, ConocoPhillips 3.35%, Chevron 3.12%, Exxon Mobil 2.71% and SLB 2.13%.
Higher oil cuts both ways for the wider market. It lifts energy companies' profits, but it also feeds into inflation through fuel and transport costs, which can keep interest rates higher for longer. On Thursday, though, bond investors weren't alarmed: the 10-year Treasury yield fell to 5.23% from 5.28%, and the 30-year to 5.61%, both still near their highest levels since the early 2000s. Brent remains well below its March peak close of $118.35, and much of the day's move depends on events — a storm's path, a political statement — that can reverse quickly.