Brent slips in choppy session as investors weigh attacks on ships, Saudi infrastructure

Oil prices slipped after touching a five-month high during a choppy ‌session on Tuesday as traders weighed Houthi attacks on Saudi infrastructure and reports of vessel attacks in the Gulf. Yemen’s Iran-aligned Houthis said on Monday they launched several attacks on Saudi energy, airport and military targets, such as an Aramco site in Yanbu, the Shaybah oilfield, Riyadh’s King Khalid International Airport and Abha airport.

Saudi authorities did not immediately confirm the Houthi claims and Reuters could not independently verify them. Brent crude futures fell $1.11, or 1.01%, to $108.44. Earlier in the session, the front-month contract reached $111.99, a five-month high.

The November contract for US West Texas Intermediate crude, which expires on Tuesday, was down 91 cents, or 0.88%, at $102.75. That was down from the session high of $110.48, the highest since April for a nearby contract. The more active December contract was down 97 cents, or 0.98%, at $97.57 a barrel.

“Oil prices remain well-supported. … This suggests the market is pricing in a significant risk premium, given the situation’s volatility,” ING analysts said in a note on Tuesday. At least 18 vessels were reportedly attacked over two weeks, which keeps the risk premium intact, shiptracker Kpler said in a note on Monday.

Also on Monday, a Houthi attack on a training camp for government security ‌forces in Yemen’s Shabwa province killed 58 people and injured more than 200. The renewed attacks heightened fears about regional stability and underscored continuing risks to energy supply from the region, keeping oil prices above $100 a barrel.

Israeli Prime Minister Benjamin Netanyahu said in a statement he is “committed to completing the elimination of the Iranian regime,” and spoke with US President Donald Trump about it on Sunday.

Russian diesel cargoes are returning to their traditional destinations after the US suspended sanctions and secured the lifting of an export ban, with at least two tankers signaling trips to Turkey and Brazil in recent days, according to shipping data from Kpler and LSEG.

The US is working with domestic refiners to squeeze more crude through the refining complex, US Energy Under Secretary Kyle Haustveit said on Tuesday at the Drake Forum in Titusville, Pennsylvania, a sentiment echoed by US Energy Secretary Chris Wright later on Tuesday at a Houston announcement.

The US is also pushing shuttered domestic refineries to reopen, Wright added. In the US, analysts expected crude oil stockpiles to have fallen last week along with product inventories, a preliminary Reuters poll showed on Monday. Reuters