HOUSTON: Brent crude was up on Thursday but well off session highs of US$119 a barrel while US crude futures finished with a small loss hours after hitting a session high over $100 a barrel.
Trading was volatile as Iran attacked energy targets overnight in the Middle East, leading the US government to take steps to expand supply as President Donald Trump looked toward November midterm elections where his Republican Party hopes to retain control of Congress.
Brent futures settled at US$108.65 a barrel, up $1.27, or 1.18%. Earlier in the session, Brent had climbed more than US$11 to a high of US$119.13, close to the 3-1/2-year peak touched on March 9.
US West Texas Intermediate crude finished at US$96.14 a barrel, down 18 cents or 0.19%. Earlier, WTI gained almost US$4 to trade at US$100.02. WTI has been trading at its widest discount to Brent in 11 years.
Middle East benchmark Dubai and Oman premiums hit all-time highs at about US$65 per barrel, according to trade sources and Reuters data.
Trump is keen to counteract rising fuel costs ahead of November elections. Treasury Secretary Scott Bessent said the US may soon remove sanctions from Iranian oil that is stranded on tankers, amounting to around 140 million barrels.
"One hundred and forty million barrels is not a whole lot, but it's something to calm the price rally at least for a moment," said John Kilduff, partner with Again Capital.
Bessent also said another release of crude oil from the US Strategic Petroleum Reserve was possible.
"This pullback from the highs suggests the market has gained more confidence in supply," said Phil Flynn, senior analyst with Price Futures Group.
On Wednesday, the Federal Reserve held US interest rates steady, projecting higher inflation as policymakers watch the impact of the war.
Israel attacked Iran's South Pars gas field, but Trump said late Wednesday that the US and Qatar were not involved. South Pars is the Iranian sector of the world's largest natural gas deposit, which Iran shares with US ally Qatar on the other side of the Gulf.
Trump said Israel would not attack Iranian facilities in South Pars again unless Iran attacked Qatar, and warned that the US would also respond if Iran acted against Doha.
On Wednesday, QatarEnergy had said Iranian missile attacks on Ras Laffan, the site of Qatar's core LNG plants and the world's largest, caused "extensive damage". The attack also hit Shell's 140,000 barrel-per-day Pearl gas-to-liquids plant in Qatar, halting output.
European gas prices soared to their highest in more than three years.
Saudi Arabia said it intercepted four ballistic missiles and an attempted drone attack on a gas facility.
Saudi Aramco's SAMREF refinery, in which Exxon holds a stake, in the Red Sea port of Yanbu, was also targeted in an aerial attack on Thursday. Oil loadings at the port were disrupted but have now resumed.
Kuwait Petroleum Corporation said its Mina al-Ahmadi refinery was hit by a drone, igniting a limited fire.
Earlier, Reuters reported that Trump's administration is considering deploying thousands of US troops to reinforce its operation in the Middle East. — Reuters
