Oil Price Jumps 2% Above $102 On Middle East Supply Fears; Brent Eyes $108

Oil prices jumped more than 2% on Thursday, October 8, with Brent crude crossing $102 a barrel as rising attacks on ships in the Middle East renewed concerns over oil supplies through the Strait of Hormuz.

Brent crude was trading at $101.53 a barrel earlier in the session, up $1.33, or 1.33%, while US West Texas Intermediate (WTI) crude rose $1.11, or 1.26%, to $89.39 a barrel. Brent later moved above $102.

The rise came despite fresh efforts to bring more oil into the market. International Energy Agency members on Wednesday backed a faster release of roughly 100 million barrels that remain undeployed from earlier pledges, with diesel supplies taking priority. France is also reportedly drawing 10 million barrels of diesel from its reserves.

The market reaction, however, showed that concerns over immediate supplies have not eased. Brent settled just 38 cents lower at $100.20 on Wednesday, while US diesel futures climbed back above $4.65 a gallon and petrol futures also firmed.

“Governments are now turning to their emergency stocks for diesel, not just crude — and diesel rose anyway,” said Anindya Banerjee, Head of Research – Currency, Commodities and Interest Rates at Kotak Neo.

Why Are Oil Prices Rising Today?

The immediate trigger for oil is the rise in attacks on tankers in the Middle East, which has put shipping through the Strait of Hormuz back in focus. The route is critical for global crude and fuel supplies, making any disruption to vessel movement a risk for oil prices.

Banerjee said the physical oil market continues to signal tight supplies despite efforts to cool prices through emergency stock releases. Dated Brent, which reflects crude cargoes loading in the near term, continues to trade well above futures prices.

US inventory data added to the supply concerns. Crude stocks fell by 3.2 million barrels last week when a build had been expected. The US Strategic Petroleum Reserve has also fallen to 283 million barrels, its lowest level since 1982.

Another risk is emerging from the US Gulf Coast. Tropical Storm Isaias is forecast to strengthen into a hurricane and reach the northern Gulf Coast late Friday as a Category 2 storm. The Gulf Coast accounts for about half of US refining capacity, while petrol stocks in the region are already at their lowest since 2017.

The combination of Middle East shipping risks, falling US inventories and possible disruption to US refining has kept oil prices firm despite the planned release of emergency supplies.

Oil Price Outlook: Can Brent Crude Reach $108?

Banerjee expects the broader trend in Brent to remain positive as long as prices stay above the $95-$98 zone. “The consolidation within the uptrend has become very tight, and as long as prices sustain above the $95–98 zone the bias remains upward,” he said.

The next resistance is at $108, followed by $110. Banerjee sees $98-$110 as a bullish consolidation range, with a break above the upper end potentially opening the way towards a fresh 52-week high.

The gap between Brent and WTI has meanwhile widened to around $12 a barrel. Banerjee said disruptions stretching from West Asia to the Black Sea are supporting Brent, the seaborne benchmark, more than WTI, the US benchmark.

The difference is also relevant for domestic commodity traders because Indian crude futures are priced off WTI. As long as the divergence persists, domestic crude contracts may not fully reflect the strength seen in Brent.

For now, tanker movements through the Middle East, emergency stock releases and the hurricane threat to the US Gulf Coast remain the key triggers. With Brent back above $102, the $108-$110 zone is the next major level to watch if supply concerns persist.

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