Key Highlights

● Brent crude was near $118 a barrel early Friday, with WTI around $104.

● United's third-quarter fuel expense rose 61.6% to $4.84 billion from a year earlier.

● Operating revenue hit a record $17.9 billion, while Net Income rose 8.5% to $1.03 billion.

● United expects fourth-quarter revenue growth above 20% and holds $17.7 billion of liquidity.

United Airlines (NASDAQ:UAL) is on watch before Friday's open as the oil market pushes higher again. Brent crude, the global benchmark, was near $118 a barrel early Friday, and that matters for an airline whose third-quarter fuel bill already rose by more than 60%. A pre-market move for United shares could not be confirmed, so no direction is described.

The oil picture

Brent rose 2.5% to $117.80 and WTI rose 2.18% to $104.20 as of about 7:41 a.m. ET, according to market data. Iran said four tankers hit mines in the Strait of Hormuz, three of which caught fire, according to the Islamic Revolutionary Guard Corps. Houthis also claimed strikes on Saudi oil facilities. Market data show Brent up about 12% in October and at a six-month high.

The concern for airlines is that jet fuel prices follow crude, and there is little sign yet that the Supply disruptions are easing. Analysts and officials cited in market reports fear fighting could resume around the November 3 midterms.

United's fuel exposure

United reported third-quarter results on October 20. Aircraft fuel expense rose 61.6% from a year earlier to $4.84 billion, and its average fuel price was $3.90 a gallon, up 60.3%, according to the company's release. The release said "jet fuel prices remained volatile."

The company still delivered record revenue. Operating Revenue rose 17.4% to $17.9 billion, net income rose 8.5% to $1.03 billion, and diluted EPS was $3.14. Adjusted diluted EPS was $2.54, which United described as within guidance. Revenue per available seat mile rose 15.9%, but cost per available seat mile rose 17.3%, showing how fuel is eating into the benefit of higher fares.

Capacity, measured in available seat miles, grew just 1.3% in the quarter, a sign the airline is keeping supply tight while costs run hot. United plans 10 new international destinations for summer 2027, subject to government approval, including Los Angeles to Osaka and Denver to Paris.

United said it expects fourth-quarter operating revenue to grow more than 20% from a year earlier. CEO Scott Kirby said, "Our employees met the challenge of our ever-changing environment and our results prove the resilience." He also credited its Starlink Wi-Fi rollout: "We are winning new long-term, brand-loyal United customers because they are trying us for Starlink."

United ended the quarter with $17.7 billion of Liquidity and expanded its revolving Credit Facility to $5 billion from $3 billion on October 16. It also noted Middle East conflicts as a fuel supply risk, and its revenue from Middle East, India and Africa routes fell 17.3% to $287 million in the quarter.

United trades on the Nasdaq and is a member of the Dow Jones Transportation Average, the 20-stock index of airlines, railroads, truckers and delivery companies. Airlines are among its most fuel-sensitive members. Friday's market is split: Dow futures were flat around 8 a.m. ET while S&P 500 futures were down about 1.1% and Nasdaq-100 futures about 2.6%, according to a live market blog, as Amazon (NASDAQ:AMZN) and Intel (NASDAQ:INTC) weighed on technology.

Risks and what to watch

If oil stays above $100, airlines may need to keep raising fares or cutting capacity to protect margins. United's strong revenue growth gives it some room, but costs are rising faster than unit revenue. A diplomatic breakthrough could reverse the oil spike quickly.

Investors will watch oil into next week, the midterm elections, and any update from United on fourth-quarter fuel costs and demand.