Brent Hits Five-Month High as Saudi Attacks Escalate, WTI Tops $100
USOI is trading near its 52-week low of $41.9 (5.3% above the low) on light trading volume (0.3× avg).
Summary
Brent crude rose to its highest since May and WTI briefly topped $100 after deadly attacks hit Dammam airport and a Saudi oil field, killing two people. Aramco told staff to evacuate its Dhahran headquarters, and the State Department ordered some diplomats and family members out of Saudi Arabia. Front-month Brent December settled up 2.6% at $111.70/bbl and Nymex WTI December rose 1.8% to $98.88/bbl. MUFG notes production and exports have not been materially impacted, but attacks on Aramco facilities keep a wide geopolitical risk premium in spot oil. This extends the supply-risk run that began with the September Houthi attacks and the collapse in Saudi output to 6.23M bbl/day in August. USOI holds crude-linked exposure and sells calls against it, so a sharp spot rally lifts the underlying while capping upside from the written options.
At the time of this announcement, USOI was trading at $44.11 on NASDAQ in the Energy & Transportation sector. The 52-week trading range was $41.90 to $61.30. This news item was assessed with positive market sentiment and an importance score of 7 out of 10. Source: Seeking Alpha.