LIVE: Oil inches dangerously close to its all-time high

Oil prices continued climbing on Friday, October 23, with Brent crude reaching its highest level in six months as traders prepared for the possibility of another round of American military action against Iran.

Brent futures gained 2.6% to $116.13 a barrel, a level last seen on April 30. The US benchmark, West Texas Intermediate (WTI), rose roughly 3% to $102.56.

Both contracts are also heading for another weekly gain. Brent has added nearly 6% since Monday and is on course to finish higher for the third week running. WTI is looking at a more modest weekly increase of around 1%.

The surge comes amidst increased confusion about what will be Washington’s next action in relation to Tehran. On Wednesday, President Donald Trump said that there will be no more talks with Iran, adding that “something” will happen “fairly soon.”

This statement was made while American officials informed the newspaper about new attacks planned after the elections.

Iran has made it clear that its military is preparing for further confrontation. The country’s army chief said its forces had improved their capabilities and were now fully equipped to conduct “asymmetric warfare,” Iranian state news agency Tasnim reported.

Meanwhile, the fighting is already causing serious problems for Saudi Arabia, where Iranian-backed Houthi militants have continued launching attacks. The US State Department has instructed all non-essential American personnel to leave the kingdom as security conditions deteriorate.

Wednesday was particularly deadly. A drone strike on the Shaybah oil field in Saudi Arabia’s Eastern Region killed two people and injured another two, Saudi state media reported. Another attack on King Fahd International Airport in Dammam left at least two people dead and eight others wounded.

The security situation has necessitated certain actions from Saudi Aramco too. According to a Reuters report, the state-owned oil firm asked its workers to vacate its headquarters in Dhahran and work from home due to the latest attacks by the Houthis.

Moving away from oil prices, investors have been withdrawing their money from stocks due to new fears of spending on artificial intelligence and interest rates. As a result, the 10-year US Treasury bond yield has fallen under 5%.

At press time, the 10-year yield had recovered one basis point to 4.966%. The rate is particularly important because it helps determine borrowing costs for mortgages, vehicle financing and credit cards.

The 2-year Treasury yield, which is more sensitive to Federal Reserve interest rate expectations, climbed two basis points to 4.658%. The 30-year yield, which also responds to geopolitical risks, barely moved at 5.292%.

US equities were struggling. The S&P 500 slipped 0.6%, while the Dow Jones Industrial Average lost 670 points, equivalent to 1.3%. The technology-heavy Nasdaq suffered a much steeper decline of 5%.

Shares of Microsoft (MSFT) and Meta Platforms (META) were under pressure, although some semiconductor companies managed to recover slightly. Micron Technology (MU) and Advanced Micro Devices (AMD) each gained more than 1%.