Crude oil ends at $97.97, highest close since mid-September

Crude oil futures rose $0.88, or 3.03%, settling at $97.97 per barrel. The session high reached $98.32, while the low was $93.58.

Behind the move, U.S. crude inventories dropped by 8.6 million barrels, far exceeding the anticipated draw of 288,000 barrels. This inventory surprise contributed to WTI's relative strength.

In the Middle East:

• Iran has increased pressure on maritime traffic. Reports from yesterday show a shift in Iranian tactics, with more frequent attacks around the Strait of Hormuz extending into broader waters. Iranian officials said the aim is to keep oil prices elevated before the U.S. elections. This endangers the recovery of regional exports and pushes up shipping and insurance costs.
• The conflict between Saudi Arabia and the Houthis continues to intensify. Saudi authorities reported intercepting a missile over Medina and a drone over the Eastern Province, a key oil-producing region. Responsibility for the Medina attack remains in question. Meanwhile, Houthi missiles and drones struck near the presidential palace in Aden, killing at least two. Fighting near the Bab el-Mandeb strait introduces further shipping risks. The Houthi rebels have also declined a meeting with Saudi Arabia.
• Transport costs amplify the energy shock. Higher freight and insurance premiums make delivered crude more expensive, even when supply itself is adequate. Reuters reports tanker rates have risen sharply as conflict disrupts routes and reduces vessel availability.

A risk premium from Middle East tensions remains in oil prices, and the inventory miss gave an extra boost to WTI on the day. The key question is whether the attacks will lead to lasting reductions in export volumes. Such a scenario would reinforce the rally with a solid fundamental basis, while restored safe passage and recovering shipments would relieve pressure. Time will reveal the outcome, though price movements will offer hints.

Today's high tested a swing high area from early June, with the upside target zone between $97.00 and $98.48.

With the high at $98.32, sellers have managed to cap the price at that resistance. A break above that level would open the way toward $100, followed by $105 as the next major targets.

On the downside, a move back below $97 would provide sellers with more confidence. Without that, buyers remain firmly in control.