Brent crude reached $115.84 on Friday, marking its highest price since May. This surge follows Houthi attacks on Saudi energy facilities, including sites in Yanbu and the Shaybah oilfield, alongside reports of potential US strikes on Iran. Meanwhile, WTI crude rose 1.35% to $100.81, and heating oil increased 1.48% to $5.01 per gallon, while US natural gas dropped 2.86% to $2.72 per MMBtu.
The energy market rally coincided with a decline in risk assets. On Thursday, the Nasdaq Composite fell 2.6% to 26,008.86, and the S&P 500 dropped 1.21%. Meta shares declined nearly 7% after the company raised its 2026 spending forecast to $135 billion. Total cryptocurrency market capitalization decreased by 3.74% over 24 hours, reaching $2.76 trillion, with assets like Ethereum, XRP, and TRON seeing losses.
Analysts from ING stated that their previous forecast of $80 per barrel for Brent in the fourth quarter is no longer viable due to geopolitical tensions. Commodity trader Jack Prandelli noted a divergence in the market, as physical Dated Brent prices fell from approximately $135 in early October to around $118, while Brent futures rose to about $112.
Rising oil prices are fueling inflation concerns and impacting Federal Reserve policy expectations. Traders currently estimate an 83% probability that the Fed will maintain interest rates during the October 27–28 meeting. Upcoming market tests include the Fed's rate decision on October 28 and earnings reports from Microsoft, Amazon, and Alphabet.
