DTN Oil Update

Karim Bastati
DTN Analyst

VIENNA (DTN) -- Brent futures advanced to their highest in seven weeks Tuesday morning after fresh Houthi attacks on Saudi energy facilities forced shut operations. WTI's front-month contract touched a 13-week high in early morning trade.

By 9:00 a.m. EDT, ICE Brent for October delivery was up $0.68 to trade near $97.68 bbl, and NYMEX WTI for October delivery rose $1.20 to $92.68 bbl.

Downstream, NYMEX ULSD for October delivery advanced $0.0474 to $4.5876 gallon, and front-month RBOB futures gained $0.0297 to $3.2443 gallon.

The U.S. Dollar Index softened by 0.285 points to 98.865 against a basket of foreign currencies.

Futures have been under increasing pressure following this weekend's escalation in the U.S.-Iran war. The U.S. on Saturday struck three Iranian oil tankers attempting to circumvent the American embargo, after Iran had targeted U.S. warships in the region. Tehran vowed retaliation in the form of military attacks and "economic warfare."

Tuesday morning, the Iran-allied Houthi militia based in Yemen struck several refineries and crude processing facilities in Saudi Arabia. While crude oil continued to flow through the Strait of Hormuz at a reduced rate, these latest attacks served to further tighten the screws on an already undersupplied global middle distillate market.

Attacks on refineries in the region added to the loss of refined product supply stemming from the partial blockade of exports from the Persian Gulf as well as from Ukrainian strikes on Russian refineries curbing production and forcing the country to ban fuel exports. All this came against the backdrop of months of Asian refiners operating at reduced rates because of the lack of available crude from the Middle East, resulting in rapidly dwindling global fuel inventories.

Monthly updates to some of the most watched global oil market forecasts are scheduled for release this week. The U.S. Energy Information Administration's Short-Term Energy Outlook is due on Wednesday, followed by the Organization of the Petroleum Exporting Countries' monthly report on Thursday and the International Energy Agency's oil market report on Friday.