Oil Snaps Back as Shipping Attacks Rekindle Supply Fears

Crude prices rebounded sharply after renewed attacks on Middle East shipping and a larger-than-expected draw in U.S. crude inventories reignited supply concerns. The move reverses part of last week's near-5% slide, which followed optimism that Washington and Tehran could strike a deal to reopen the Strait of Hormuz.

Houthi attacks on vessels in the Red Sea and threats near Hormuz have pushed freight and insurance costs higher, with traffic through the strait — which normally carries roughly 20 million barrels of oil per day — severely constrained by security and insurance issues.

Energy majors moved with the tape: Chevron shares jumped in premarket trading as crude surged, and CEO Mike Wirth warned the threat to global oil supplies is 'very real.' The renewed tension tempers the market optimism that had powered equities to records earlier in the week.