Market News

Key Points

• U.S. officials told The Wall Street Journal that the aircraft carrier will arrive in the region by the end of November.
• Meanwhile, Reuters reported that China’s state oil major PetroChina canceled a handful of gasoline and jet fuel shipments that were planned for October.

Oil prices rose sharply Thursday, following a report the U.S. is sending a third aircraft-carrier strike group to the Middle East.

Brent crude, the international benchmark, gained 4.4% to close at $102.31 per barrel, while U.S. West Texas Intermediate futures advanced 2.7% to settle at $92.87 per barrel.

U.S. officials told The Wall Street Journal that Marine Corps ships and up to 10,000 additional troops are also being deployed to the region. The forces are expected to arrive by the end of November, the officials said.

The USS Theodore Roosevelt left San Diego on a scheduled deployment Sunday, The Journal reported. The USS George H.W. Bush and USS George Washington are currently in the Middle East.

The deployment could signal the U.S. is preparing to escalate against Iran. President Donald Trump has told his aides that he expects to start bombing Iran again after the U.S. midterm elections in November, U.S. officials told The Wall Street Journal last week.

“The president I think is going to escalate after the midterms, we keep hearing that the Iranians are going to escalate into the midterms,” Scott Modell, CEO of Rapidan Energy and a former CIA office, told CNBC on Monday. “The direction of travel is toward escalation.”

Oil prices are rising even as crude flows from the Middle East have basically recovered to prewar levels. But the recovery is fragile with at least three tankers coming under attack this week as they tried to transit the Strait of Hormuz, according to maritime security agencies that monitor the region.

Meanwhile, fuel shipments from the Middle East are still constrained.

The world is facing a major disruption to its fuel supplies as Ukrainian strikes on Russian refineries forced Moscow to ban diesel exports. Iran and its Houthi allies have also attacked refineries in the Middle East.

Diesel prices in the U.S. hit record highs last month on the disruption and remained elevated Thursday at $6.40 per gallon on average. President Donald Trump has said he is weighing an export ban, though appeared to back off the idea in recent public comments.

Meanwhile, Chinese refiners cancelled a handful of gasoline and jet fuel exports planned for October, unnamed sources told Reuters, in a possible sign Beijing is trying to safeguard domestic supplies.