Investing.com — Oil prices rose Thursday as Hurricane Milton hit Florida hard, adding to concerns about potential supply disruptions in the Middle East.
By 09:29 ET, the contract climbed 1.4% to $77.66 per barrel, while futures (WTI) traded 1.4% higher at $74.27 per barrel.
Both contracts have fallen around 5% over the last two sessions and have gained by 10% over the past week.
In the U.S., Hurricane Milton has made landfall in Florida, and while the storm has largely dodged the oil infrastructure in the Gulf of Mexico it has already driven up demand for gasoline in the state, which has helped support crude prices.
Additionally, traders remained on edge over a potential escalation in the conflict in the Middle East, especially if Israel targets Iran’s oil facilities. Iran currently produces 3.3 million barrels per day of crude oil.
“If domestic refining capacity is impaired, then it would leave more crude oil available for export. On the other hand, any damage to Iran’s upstream assets would be an upside risk for oil price. For now, real time shipping data shows Iran’s oil export are stable,” strategists at Bernstein said in a note to clients.
The analysts flagged that any major disruption to oil flows in the region could push crude prices up to $100 a barrel.
Prices could even top the $100 per barrel mark should the conflict lead Tehran to close the Strait of Hormuz, a crucial shipping chokepoint, the Bernstein analysts said. At that level, they warned demand for oil could begin to deteriorate.
“While it is not our base case that oil goes to $100, this cannot be ruled out in the short term,” the analysts noted.
However, they predicted that, should further tensions be avoided, oil prices could fall back to $70 a barrel in the near term.
