Brent crude hits $100 a barrel for first time since 24 July

(Sharecast News) - Brent crude hit $100 a barrel on Wednesday for the first time since 24 July amid escalating tensions between the US and Iran. At 0910 BST, Brent crude was up 2.1% at $99.93 a barrel, having breached the symbolic $100 mark earlier, while West Texas Intermediate was 1.6% higher at $94.53 after US military strikes on Iranian oil tankers near Kharg island.

The US Central Command said it had destroyed five Iranian crude oil carriers after the Islamic Revolutionary Guard Corps (IRGC) targeted a US Navy warship with ballistic missiles twice over the past two days.

Neil Wilson, UK investor strategist at Saxo Markets, said: "Oil prices hit triple digits as the US and Iran continue to exchange military strikes, which continues to pile upwards pressure on oil prices and bond yields. The US struck a number of Iranian tankers, with Tehran aiming missiles at an American base in Jordan.

"Brent extended Tuesday's rally overnight and has pushed up to $100 a barrel, hitting its highest since July. The spectre of an even more prolonged disruption looms over markets - intensification of attacks on tanker shipping could push front-month contracts a lot higher from here. Meanwhile, European TTF gas futures have kicked on once more to fresh three-and-a-half-year highs at €787.76."

Kathleen Brooks, research director at XTB, pointed out that $100 a barrel is a psychological level that matters for markets.

When the oil prices rises above this level, it gives many central banks "no choice but to hike rates, it will increase costs for businesses and consumers and ultimately could weigh on economic growth", she said.