Oil rebounds as Middle East supply fears persist

BEIJING

Oil prices rebounded on Oct. 21 as threats to Saudi energy facilities and shipping in the Gulf sustained concerns over supply, while gold edged lower ahead of next week’s U.S. Federal Reserve meeting.

Brent crude futures rose 1.5 percent to $110.38 a barrel at 0350 GMT, while U.S. West Texas Intermediate crude for December delivery gained 1.4 percent to $99.18.

The gains followed a volatile session in which Brent reached $111.99, its highest level in five months, before settling lower at $108.79.

Prices retreated as traders weighed efforts to revive negotiations between Washington and Tehran against the risk of further disruption to Middle Eastern supplies.

Yemen’s Iran-aligned Houthis said on Oct. 19 that they had attacked a Saudi Aramco site in Yanbu, the Shaybah oilfield and airports in Saudi Arabia.

Saudi authorities did not immediately confirm the claims, which could not be independently verified.

ING analysts said the market was pricing in a substantial premium for the risk of supply disruptions.

Reports of attacks on vessels in the Gulf have added to concerns over the security of oil shipments.

Falling U.S. inventories also supported prices.

Crude stocks declined by 4.9 million barrels in the week ended Oct. 16, market sources told Reuters, citing American Petroleum Institute data.

Meanwhile, U.S. sanctions relief has helped Russian diesel cargoes return to their traditional markets. Shipping data from Kpler and LSEG showed tankers signaling voyages to Türkiye and Brazil following the suspension of sanctions and the lifting of Russia’s export ban.

In precious metals, spot gold slipped 0.1 percent to $4,118.64 an ounce at 0018 GMT on Oct. 21. Higher energy prices have kept inflation concerns and the prospect of further U.S. interest rate increases in focus, weighing on bullion.

Investors are awaiting the Fed’s Oct. 27–28 meeting. Economists polled by Reuters broadly expect rates to remain unchanged this month, followed by an increase in December. Higher rates tend to reduce the appeal of gold, which pays no interest.