Oil Nears $105 as Trump Reportedly Weighs Renewed Iran Strikes

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4▲4 ▼1Impact / 5
Summary · why it matters

Oil prices continued to climb on Thursday as Tehran-Washington tensions persisted following a report that the Trump administration may be considering renewed strikes on Iran. Brent crude rose to trade back near $105 per barrel, while West Texas Intermediate crude was close to $92 a barrel. The move followed reporting by The Atlantic that said President Trump may be considering striking Iran before the midterm elections, with the Pentagon weighing options though no final decision has been made, and came amid recent increased incidents of vessel attacks near the Strait of Hormuz. A tropical storm nearing the Gulf Coast and threatening to make landfall as a hurricane by Friday prompted Chevron to evacuate nonessential personnel from its offshore platforms in the region. David Morrison, senior market analyst at Trade Nation, noted that these factors outweighed the news that the International Energy Agency was accelerating the release of stockpiles of oil and distillates. Higher energy costs are adding to expectations that the Federal Reserve will maintain its tightening stance to curb inflation, with the market fully pricing in a 25 basis point rate increase in December, and the 10-year yield rising to 5.32%. Gasoline prices averaged $4.36 per gallon on Thursday per AAA data, while diesel stood at $6.28 per gallon, down $0.02 from Wednesday, and President Trump said Tuesday he is considering suspending the federal gas tax ahead of November's midterm elections.

Impact on assets 5

Energy▼
Chevron Corp
CVX
▼ NegativeSupplyrelevance

Chevron evacuates nonessential personnel from Gulf Coast offshore platforms as tropical storm threatens, disrupting its production.

Others▲
⛏Brent Crude Oil Futures
BRENT
▲ PositiveGeopoliticsrelevance

Tehran-Washington tensions and possible renewed Iran strikes push Brent back near $105 per barrel.

⛏Crude Oil WTI Futures
WTI
▲ PositiveGeopoliticsrelevance

Reported possible renewed US strikes on Iran and vessel attacks near the Strait of Hormuz raise supply-risk concerns, lifting WTI toward $92.

Others▲
％Effective Federal Funds Rate
EFFR
▲ PositiveMonetaryrelevance

Higher energy costs reinforce expectations the Fed keeps tightening, with a 25bp December hike fully priced in, pushing the policy rate/yield up.