Global oil prices finished the week higher for a third consecutive week, closing a volatile seven days in which hopes of calmer Middle East tensions were repeatedly overtaken by fresh supply worries. Brent crude ended the week at $113.40 a barrel, while US benchmark WTI closed at $104.10, levels that put both benchmarks at their highest since late April.

A week that swung both ways

The week began with prices easing as traders took comfort from signs that diplomatic efforts might reduce the risk of wider disruption. That relief proved short-lived. Fighting in Yemen and an attack on a refinery in Saudi Arabia pushed prices higher midweek, as markets priced in a greater risk to Gulf supplies and shipping. Prices dipped again on Thursday as reports of renewed US-Iran peace contacts circulated, before jumping more than 2% in the final session of the week.

What supported the rise

Two factors helped lift prices beyond geopolitics. US crude stockpiles fell by 1.9 million barrels in the week to 23 October, according to the US Energy Information Administration, a larger drop than many traders had expected. Analysts also pointed to concern that Washington could step up military action against Iran after the US midterm elections on 3 November, keeping a risk premium in the price even when headline diplomacy looked more positive.

What comes next for buyers

For the month as a whole, Brent rose 13.6% and WTI gained 15.2%, their largest monthly increases in six months, according to the market summary. Saxo Bank warned in a 29 October report that prices could stay volatile in the coming weeks, shaped by the US midterms and Israel's recent election. This is market reporting only, not financial advice, and no price forecast is presented here as a certainty.

Sources: Stockbiz; Economies.com.