Oil Prices Rise Amid Hurricane Milton and Middle East Tensions

Oil prices rose on Thursday, influenced by Hurricane Milton's impact on Florida and concerns over potential Middle Eastern supply disruptions.

By 09:29 ET, the Brent contract increased by 1.4% to $77.66 per barrel, while U.S. crude futures (WTI) also climbed 1.4% to $74.27 per barrel. Both contracts have seen a decline of about 5% over the last two sessions but have gained 10% over the past week.

Hurricane Milton has made landfall in Florida, sparing much of the oil infrastructure in the Gulf of Mexico. However, it has driven gasoline demand in the state, which supports crude prices.

Traders are also concerned about a potential escalation of conflict in the Middle East, particularly if Israel targets Iran's oil facilities. Iran currently produces 3.3 million barrels of crude oil daily. Bernstein strategists warned that disruptions to oil flows in the region could push prices up to $100 a barrel.

The potential closure of the Strait of Hormuz by Iran in response to conflict could also lead to higher prices. Nevertheless, analysts noted that if tensions ease, oil prices may fall back to $70 per barrel in the near term.

> “While it is not our base case that oil goes to $100, this cannot be ruled out in the short term,” analysts cautioned.