By Siddharth Cavale
NEW YORK, Nov 12 (Reuters) - Oil prices jumped on Thursday and settled up by $3 a barrel after attacks on Saudi energy infrastructure escalated and shipping disruptions through the Strait
of Hormuz threatened global oil flows.
Brent futures settled at $95.82 a barrel, up $3.06 or 3.3%. US West Texas Intermediate crude closed at $88.74 a barrel, up $2.21 or 2.6%.
For the week, both benchmarks were still down about 2.5%.
Trade was volatile, with crude selling off early and then rebounding after Yemen's Iran-aligned Houthis said they had attacked a pumping station on the Saudi East-West oil pipeline; an oil facility in the Saudi Red Sea city of Yanbu; and an Aramco building in the capital Riyadh.
Later, the Saudi-led military coalition fighting the Houthis said it had intercepted and destroyed two drones launched by the group, one in the Riyadh region and another in the kingdom's oil-rich Eastern Province.
In the Gulf, tankers are still ablaze, oil spills are washing ashore and drones and missiles have hit infrastructure across the region. On Thursday, Iran's military said four oil tankers were hit by explosions in the Strait of Hormuz after ignoring warnings. Reuters could not immediately verify the Iranian accounts.
Attacks on shipping in the Middle East have increased in recent weeks. The Strait of Hormuz carried nearly one-fifth of the world's crude oil before the US-Israeli conflict with Iran.
Elsewhere, Ukraine said its drones hit the port area of Ust-Luga on the Baltic Sea in Russia's northwest, triggering a fire and damaging part of its network of fuel tanks, its latest attack on Russian energy infrastructure. Ust-Luga is a major oil, oil products and grain export outlet, along with other commodities.
"The tit-for-tat exchanges between Russia and Ukraine and attacks on shipping by the IRGC are beginning to add ... price pressure," said Timothy Snyder, chief economist at Matador Economics.
"It is beginning to look like investors are growing weary from hearing the same song on peace prospects."
VOLATILE TRADING
Oil fell $1 in early Asian trading before US President Donald Trump posted on social media that Washington did not need a deal with Iran.
"Those days have long since passed. We’ve got their money, Hundreds of Billions of Dollars, and we’ve got their Strait!" he wrote.
Also weighing on prices, OPEC+ data showed crude production rose in October, driven by higher Saudi Arabian output despite shipping disruptions in the Middle East.
Meanwhile, Ukraine peace talks between Russian President Vladimir Putin and US negotiators Steve Witkoff and Jared Kushner began in the Kremlin. In a potential breakthrough, a US envoy said Putin agreed to include European representatives in the next round of negotiations.
In the US, crude, gasoline and distillate inventories rose last week, the Energy Information Administration said on Thursday. [EIA/S] [API/S]
Washington is set to extend a waiver of a US law in the coming days allowing some foreign-flagged ships to transport oil and other commodities between US ports, four industry sources said on Thursday.
(Reporting by Siddharth Cavale in New York, Seher Dareen in London, Yuka Obayashi in Tokyo and Siyi Liu in Singapore; additional reporting by Stephanie Kelly; Editing by Thomas Derpinghaus, Alexander Smith, Louise Heavens, Nick Zieminski, David Gregorio and Sanjeev Miglani)
