Brent climbs above $110, its highest since May, as WTI breaks $100

what happened

December Brent futures gained 3.7% on Friday to settle at $109.86 a barrel, the strongest close since May 19. November WTI added 3.5% to $101.41, its highest settlement since September 17. Over the week WTI jumped 10.4%, its biggest weekly rise since mid-July, while Brent gained 4.9% for a fourth straight weekly advance, according to Seeking Alpha.

Several factors supported the rally. Two cargo ships sank near the Strait of Hormuz after attacks earlier this week, lifting freight and insurance costs. Ukraine reportedly hit Russia's Ryazan refinery on Thursday, after President Zelenskyy said Kyiv was dropping a ceasefire on energy sites that President Trump had announced a week earlier. US distillate stocks, which include diesel and heating oil, fell to 102.6 million barrels, 12% below a year earlier, according to the Energy Information Administration. On Friday Washington also asked to swap as much as 17 million barrels of crude out of the Strategic Petroleum Reserve.

why it matters

The rally rests on a mix of Hormuz shipping risk, attacks on refining capacity and thin fuel inventories, and the reserve release only partly eases that pressure. Analysts disagree on the outlook: Dennis Kissler of BOK Financial argues the bull market is intact, while Julius Baer's Norbert Rucker says prices above $100 look stretched because Middle Eastern exports have largely recovered and global stocks remain comfortable. US natural gas futures fell 3.7% to $3.1160 per MMBtu as traders looked past an expected cold spell in the Northeast. Energy stocks, tracked by the XLE ETF, rose 4.8% over the week.

market impact

Oil and fuels: supply-risk premium lifts Brent and WTI, diesel and gasoline costs rise

tags

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