Tanker Attacks Lift Brent to $105; Stock Futures Slide
Brent crude climbed to $105 a barrel this morning. After slipping below $100 on Monday, it rose about 5% overnight; WTI trades near $92.50. What is new is the pace of attacks in the Strait of Hormuz.
Kpler data show 10 tankers were struck in the strait in the week of September 28 to October 4. The previous weekly record was six. Only seven tankers transited on Tuesday, the lowest count since July 23.
Another tanker was hit by "multiple projectiles" on Wednesday, with casualties reported. The shipping recovery that pushed prices lower on Monday has reversed this week. European diesel futures jumped 6% on Wednesday.
The oil spike is dragging futures lower. S&P 500 futures are down 0.5% and Nasdaq 100 futures 0.7%. Markets are not reading oil as an energy story; they are reading it as a rates story.
The reason is the Fed minutes released yesterday afternoon. Most participants said another hike "would likely be appropriate by year end." The minutes also flagged the risk that energy costs spread into broader price pressures.
Fed Governor Christopher Waller kept to that line in Istanbul this morning, adding that hikes need not come at consecutive meetings.