DTN Oil Update
Oil Set for Large Weekly Gain on Russian Supply Concerns
VIENNA (DTN) -- Oil prices rallied a fourth straight day on Friday, Sept. 26, heading for their best week since June, amid pressure for greater sanctions against Russia, which also cut fuel exports after domestic shortages caused by Ukrainian strikes on its infrastructure.
In crude oil, NYMEX-traded WTI for November delivery rose $0.52 to $65.50 bbl, and ICE Brent for November delivery gained $0.41 to $69.83 bbl.
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Among oil products, October RBOB gasoline futures rose $0.0240 to $2.0262 gallon, and the front-month ULSD contract edged higher $0.0056 to $2.4321 gallon.
The U.S. Dollar Index softened by 0.2 points to 98.32.
Already bolstered by the release of positive quarterly US GDP numbers Thursday, Sept. 25, oil futures were on track to end the week with the largest weekly gain since the opening week of June. Aside from the economic data, the rally was also fired by a drastic hawkish shift this week in U.S. policy towards Russia.
The pivot came from a White House that demanded territorial concessions from Ukraine just a month in order to achieve peace with Russia. In an about-turn Tuesday, Sept. 23, U.S. President Donald Trump said Ukraine should retake all territories occupied by Russian forces.
Trump also admonished India and China for funding Russia's war via oil purchases and again called on Europe to cede energy purchases, step up sanctions and financially support Ukraine. On Thursday, Sept. 25, he called on his Turkish counterpart Recep Tayyip Erdogan to do the same.
Ukraine, meanwhile, has been intensifying its strikes on Russian oil infrastructure, damaging fuel pumps, pipelines, fuel depots and refineries. While the extent of the damage remains opaque, fuel supply has been affected enough for Deputy Prime Minister Alexander Novak to issue on Thursday a ban on diesel exports until the year-end.
Novak also extended an existing export ban on Russian gasoline, driving prices higher, particularly in Europe, where middle distillate inventories have remained tight.