Brent January Futs Hit New Highs As Oil Market Braces For Post-Midterm Gulf Escalation

What happened: Brent January futures touched a six-month high as attacks on commercial vessels in the Strait of Hormuz and on Saudi energy assets raised concern about Gulf escalation after next week's US midterm elections. Key numbers: Brent tagged $118 a barrel early Friday. JPMorgan's Natasha Kaneva models Brent around $94. Why it matters: UBS's Dominic Ellis said spot prices and the front of the curve price in higher escalation odds, but the market is not realistically pricing medium or longer-term conflict impact, and prices could spike higher without substantive diplomatic progress.

Brent January futures touched a six-month high as attacks on commercial vessels in the Strait of Hormuz and on Saudi energy assets raised concern about Gulf escalation after next week's US midterm elections.

UBS's Dominic Ellis said spot prices and the front of the curve price in higher escalation odds, but the market is not realistically pricing medium or longer-term conflict impact, and prices could spike higher without substantive diplomatic progress.