DTN Oil Update
WTI Trades Above $100 Barrel on Escalating Mideast Conflict
HOUSTON (DTN) -- Oil crude futures jumped nearly 4% to close the week on Friday posting a second straight weekly increase, with the NYMEX WTI futures contract surged above $100 barrel (bbl) to a one month-high.
The rally was driven by expectations of global supply tightness due to the escalating Middle East conflict. A steep weekly decline on U.S. commercial crude inventories last week supported the bullish sentiment in the market.
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Front-month NYMEX WTI futures contract increase $3.28 to $101.25 bbl. ICE Brent for December delivery jumped $3.62 to $109.54 bbl.
Downstream, NYMEX ULSD for November delivery rose $0.0528 to $3.2330 gallon, and front-month RBOB futures increased $0.0519 to $4.8975 a gallon.
The U.S. Dollar Index slipped for a second day, down 0.240 points to 101.63 against a basket of foreign currencies.
Nearly eight months into the Iran war, Iran has intensified attacks on tankers in the Strait of Hormuz, while Yemen's Houthi rebels have repeatedly struck key Saudi infrastructure. The resulting surge in tanker rates to record highs has constrained U.S. crude exports to international markets.
Meanwhile, U.S., crude inventories posted a steep decline last week following hurricane-induced production shut-ins that coincided with the end of emergency oil stock releases.
U.S. Energy Information Administration (EIA) data published Thursday showed commercial crude oil inventories fell for the second consecutive week by 8.6 million bbl last week after falling by 3.19 million bbl a week earlier.
The second weekly decline in crude oil stocks raised concerns over meeting continued unseasonably high domestic demand now that emergency stock releases have ended. U.S. refiners processed nearly 1.5 million barrels per day (bpd) last week more crude oil than in the same reporting week last year, the EIA said. Over the past four weeks, domestic crude demand has been outpacing year-ago levels by more than 500,000 bpd.
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