Summary
- Brent crude oil surpassed $100 for the first time in six weeks following attacks by Houthi rebels on Saudi facilities and U.S. strikes on Iranian tankers.
- On Myriad, the likelihood of crude oil hitting $120 has increased to 56.5% since the beginning of September.
- Polymarket indicates a 59% chance that West Texas Intermediate (WTI) will reach $100 this month, marking a nine-point rise.
Brent crude oil traded at $101.09 on Wednesday morning, reflecting a 3.2% increase and marking its first time above $100 in six weeks, with West Texas Intermediate priced at $96.27. Traders in prediction markets have responded significantly to this upward movement.
The recent escalation began over the weekend, with Saudi officials reporting that Houthi rebels attacked oil facilities, resulting in 73 injuries. Concurrently, U.S. Central Command targeted five Iranian oil tankers on the same day, following strikes on three others over the weekend, in retaliation for Iranian missile attacks on a U.S. warship.
On the prediction platform Myriad, which gauges whether crude oil will reach $120 or drop to $55 first, the $120 prediction has risen to 56.5%, a notable increase of 15.1 points. Previously, both predictions had been closely matched since mid-August, with the $55 prediction leading for much of that time. However, they flipped at the beginning of September and have not reverted. Since March, the market has seen a trading volume of $12.7 million. (Disclosure: Myriad is owned by Dastan, the parent company of Decrypt.)
Myriad: Predict the next move for crude oil.Market Dynamics Shift
Polymarket shows a more pronounced shift, where the pricing for WTI's September targets has adjusted significantly. The probability of WTI reaching $100 this month now stands at 59%, an increase of nine points, while the chance of it hitting $105 has surged to 30%, up 25 points. The likelihood of WTI dropping to $90 is now at 71%, up 21 points.
Conversely, the prospect of WTI falling to $85 has plummeted by 33 points to 39%, with lower targets reflecting single-digit probabilities. Although Myriad still shows a 44.8% chance for $55 as a future outcome, Polymarket assigns just 1% to that scenario for this month. The two platforms operate differently: Myriad continues until one target is achieved, while Polymarket closes at the end of September.
Fuel prices are also climbing. Diesel reached a record $5.94 per gallon on Wednesday, surpassing last week's high, while gasoline averaged $4.22, creating challenges for Republicans ahead of the midterm elections, as affordability remains a pressing issue.