The tension in the Middle East has escalated, with Brent crude oil futures showing a slight increase in early Asian trading.

As of 12:00 Beijing time, the price of Brent crude oil contract for November was reported at $73.57 per barrel, up 11 cents from the closing price on September 25. Earlier on September 25, the contract fell by $1.71 in trading.

New York Mercantile Exchange crude oil contract for November was priced at $69.75 per barrel, up 6 cents from the closing price on September 25. Previously, the contract fell by $1.87 on September 25.

Iraq, Jordan, and Egypt jointly condemned Israel's "aggression" in Gaza and Lebanon, warning that these actions could lead to a full escalation of the situation in the Middle East. This statement comes after intense clashes between armed Hezbollah group members in Israel and Lebanon, with a series of incidents including explosions and airstrikes leading to the death of a senior Hezbollah member.

Hurricane Helen is expected to strengthen and make landfall in Florida later on Thursday, already causing about 29% of oil production in the Gulf of Mexico to shut down. According to data from the US Bureau of Safety and Environmental Enforcement, as of 12:30 Eastern time, the US offshore oil production has decreased by about 0.511 million barrels per day, while approximately 31.3 billion cubic feet per day of natural gas production, equivalent to 17% of the region's output, has also been halted. Currently, 17 offshore platforms have been evacuated.

The reduction in oil production in the US Gulf of Mexico comes at a critical time as domestic crude oil inventories are in urgent need. According to data from the US Energy Information Administration (EIA), US crude oil inventories have dropped to the lowest level in 30 months, decreasing by 4.5 million barrels last week. As of the week ending September 20, US crude oil inventories decreased to 0.413 billion barrels, down from the previous week's 0.4175 billion barrels and last year's 0.4163 billion barrels. This is the lowest level since a week ending April 1, 2022, which was recorded at 0.4124 billion barrels. Since the end of 2018, there have been only five times when stocks were lower than the current level, all occurring in the spring of 2022.

The US Treasury Department has imposed new sanctions on nine tankers allegedly representing Iran-backed Hezbollah within Lebanon and the elite forces of Iran's Revolutionary Guards' Quds Force, involved in transporting oil and liquefied petroleum gas. Since 2019, a total of 300 tankers and other vessels have been included in the US sanctions list, accused of assisting Iran's oil and other commodity exports, including the 66 tankers added by the Treasury Department's sanctions enforcement this year.

Market participants indicate that due to maintenance and decreasing gasoline demand, Russian refineries may reduce crude oil processing volumes in October. The crude oil processing volume of Rosneft's refineries in Russia may decrease by 6% from the previous month to 6.42 million tons, while the supply to Lukoil's factories may decrease by 7% from the previous month to 3.41 million tons. However, Gazpromneft, a Russian natural gas industry oil company, plans to increase crude oil supply to its refineries as the crude oil processing volume at its refinery in Moscow of 0.24 million barrels per day has been below the planned level since September, following a drone attack on September 1st.

(The above content is from Argus, an independent international energy and commodity price assessment agency)