Oil Prices Surge Amid Geopolitical Tensions and Hurricanes

This morning's market sees both crude oil and Brent prices rising, influenced largely by ongoing geopolitical tensions in the Middle East and the recent impact of Hurricane Milton making landfall in Florida. Andy Lipow, president of Lipow Oil Associates, weighed in on the matter, explaining that the oil market is absorbing fears of a potential escalation of conflict between Iran and Israel, which could lead to supply disruptions. Despite past stability in oil supply since the Hamas invasion of Israel last year, recent price increases reflect market apprehension regarding possible conflicts. Moving forward, a ceiling between $70 to $85 per barrel seems plausible, with OPEC expected to adjust production cuts in December 2024. Additionally, the Energy Information Administration's (EIA) revised demand forecasts signal a potential surplus in the market, forcing OPEC to reconsider its strategies. The conversation also touched on Hurricane Milton, which incidentally had limited effect on Gulf Coast refining, although gasoline supply to affected areas like Tampa may see delays depending on the restoration of power and navigation channels. With proactive steps taken by companies like Chevron, the timeline for supply resumption to local retail service stations appears to be promising, pending the restoration of terminal operations and infrastructure.