Oil prices continued to climb on Thursday as Middle East tensions persisted following a report that the Trump administration may be considering renewed strikes on Iran.
Brent crude (BZ=F) rose to trade back near $105 per barrel, while West Texas Intermediate crude (CL=F) 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. The outlet said the Pentagon is weighing options, though no final decision has been made.
Oil has been volatile in recent days amid increased incidents of vessel attacks near the Strait of Hormuz. Middle East tensions also esclated following Houthi claimed attacks on two airports in Saudi Arabia.
Meanwhile, a tropical storm is nearing the Gulf Coast, threatening to make landfall as a hurricane by Friday. Chevron said it is evacuating nonessential personnel from its offshore platforms in the region.
“These factors outweighed the news that the International Energy Agency was accelerating the release of stockpiles of oil and distillates,” noted David Morrison, senior market analyst at Trade Nation, on Thursday.
Read more: Trump plans another oil stockpile sell-off with global reserves already ‘scarily thin’
NY Mercantile – Delayed Quote • USD
92.84 +4.56 (+5.17%)
As of 11:22:24 am GMT-4. Market open.
CL=F BZ=F
Higher energy costs are adding to expectations that the Federal Reserve will maintain its tightening stance to curb inflation. The market fully priced in a 25 basis point Federal Reserve rate increase in December.
Bond yields have climbed higher worldwide, with the 10-year yield (^TNX) rising to 5.32%.
Volatile crude oil costs, along with maxed-out refining capacity, have caused refined fuel prices to surge.
Gasoline prices averaged $4.36 per gallon on Thursday, per AAA data. Diesel prices stood at $6.28 per gallon, down $0.02 from Wednesday.
The administration has been looking for ways to ease high energy costs ahead of November’s midterm elections.
On Tuesday, President Trump, responding to a reporter, said he is considering suspending the federal gas tax.
Ines Ferre is a senior business reporter for Yahoo Finance.
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