Saturday Money Special, and the headline writes itself: oil just touched $110 a barrel for the first time since May, and the stock market got mugged on the way out the door Friday.
The numbers. Brent crude futures settled up $3.94, or 3.7%, at $109.86 on Friday, Oct. 16. That’s the highest close since May 19, Reuters reported. U.S. West Texas Intermediate jumped $3.44, or 3.5%, to $101.41, its first trip back over $100 in about a month. For the week, Brent rose 4.9% and WTI rocketed 10.4%.
What lit the fuse. Pick a front:
- Hormuz: Reuters says attacks around the Strait of Hormuz surged over the past 10 days. Iran says it is stepping up strikes in response to the U.S. blockade of its ports and new sanctions. Kpler analysts said intensified Iranian attacks drove Gulf crude flows “sharply lower.”
- The Saudi bypass: A Saudi-led coalition said it intercepted a ballistic missile fired toward Yanbu, the Red Sea port Saudi Arabia relies on to route oil around Hormuz. Rapidan Energy Group said initial reports showed no damage. Traders also chased unverified rumors of attacks on Saudi energy infrastructure.
- Russia: Ukraine hit Russia’s Ryazan refinery, which suspended a primary crude unit, according to industry sources cited by Reuters. Diesel futures rose more than 1%, NBC News reported. Diesel matters for farms, trucks and factories, and its price has climbed faster than gasoline’s.
The bill came due on Wall Street. NBC News says tech stocks shed more than $1 trillion in value Friday. The Nasdaq 100 fell 2.5% and now sits about 7% below the record it set just last week. The S&P 500 lost 1%. The Philadelphia semiconductor index dropped 3.8%, its eighth straight losing day and its longest losing streak since 2008. Data-center names Nebius and CoreWeave were the Nasdaq 100’s two worst performers.
The emergency barrels aren’t winning yet. The International Energy Agency agreed Thursday to release more than 20 million barrels of fuel. On Friday the U.S. Energy Department asked for proposals to exchange up to 17 million barrels of crude from the Strategic Petroleum Reserve. Prices rose anyway.
Why your wallet cares. The Fed already raised rates by a quarter point in September to fight energy-driven inflation. NBC notes that higher oil makes another hike this year more likely. Wells Fargo analyst Mason Mendez warned that rebuilding depleted global inventories in 2027 “could create an additional source of demand and keep energy prices elevated for longer.”
Translation: the pump, the diesel bill and your 401(k) all took a hit this week, and nobody is promising it’s over.
Sources: Reuters (via Investing.com): Oil touches $110 a barrel for first time since May · NBC News: Tech stocks erase $1 trillion of wealth as oil surges to $110 · WSJ: Oil Prices Rise as Ukraine Renews Attacks on Russian Refineries
Featured image: editorial illustration by Bugle Blast.
Leave a Reply