Oil Stares Down a 12% Weekly Plunge as Hormuz Tanker Attacks Lift Prices

Brent futures for January climbed by $1.57, or 1.6%, reaching $99.86 a barrel as of 0222 GMT Friday. US West Texas Intermediate rose by $1.10, or 1.22%, landing at $91.62 a barrel. It was the second consecutive session of gains for both benchmarks — a modest bounce after a bruising week.

The week still looks ugly. Brent is on track to shed 12% after its December contract expired on October 30, and WTI is headed for a 12.1% slide. Prices cratered 8% on Wednesday alone, settling at two-month lows, once Democrats swept both the Senate and the House of Representatives away from President Donald Trump's Republicans.

The logic was simple: traders wagered a midterm rebuke of Trump could push toward a de-escalation of the US-Israeli war against Iran, now in its ninth month. That optimism didn't survive the week. A surge in tanker attacks Wednesday and Thursday across the Gulf and the Strait of Hormuz — the chokepoint carrying the bulk of Middle Eastern oil — snapped the selloff to a halt.

Daniel Hynes, senior commodity strategist at ANZ, said in a Friday note that prices rebounded because traders saw Wednesday's rout as overdone. He said the market had been pressed by the Democrat wins, but the reality of the situation hit home during Thursday's trading, per the note. Hynes added that Iran keeps control of the Strait of Hormuz and is unlikely to hand it over, with overall flows through the strait running below 60% of capacity.

Iran said Thursday that three more tankers had been attacked in the Strait of Hormuz. Data from UK maritime security agency UKMTO pointed to tanker attacks still running at close to record pace. For a market already jittery about supply, that's the floor holding prices up — even as the weekly scoreboard stays deep in the red.