Brent crude hits $114 a barrel, its highest since May

Brent crude, the international benchmark for oil prices, rose about 1% to $114 a barrel in morning trading on October 23, reaching its highest level since May, the Guardian reported. Analysts linked the rise to concerns about energy supplies amid conflict in the Middle East.

The gain followed a 4% rise to $113.17 a barrel the preceding day, according to Deutsche Bank’s Jim Reid, who attributed that increase to geopolitical fears.

Analysis

Analysts point to attacks and fears of further strikes

Richard Hunter, of broker Interactive Investor, attributed the price jump to widespread reports that the US was considering renewed military strikes on Iran after the US midterm elections rather than pursuing diplomacy. Hunter said the conflict was in its eighth month.

Susannah Streeter, of broker Wealth Club, said Houthi attacks on Saudi Arabian facilities had intensified that week. She described passage through the Strait of Hormuz as dangerous for ships because projectiles were still being fired, and said Ukraine’s bombardment of Russian diesel refineries was adding to supply concerns.

Streeter warned that companies were unlikely to keep absorbing higher energy and freight costs. The longer the conflicts continued, she said, the greater the risk that higher prices would become persistent across the economy.

Looking beyond the US midterm elections, Streeter said fears were growing that US and Israeli forces would be ordered to strike Iran’s energy infrastructure.