DTN Oil Update
Oil Eases After 6-Week Highs Amid Hormuz Watch
SECAUCUS, N.J. (DTN) -- Crude futures gave back most of the gains that elevated them to six-week highs Thursday as the market balanced concerns over the impact of heightened fighting in the Middle East with U.S. President Donald Trump's hints that current hostilities may wind down again.
NYMEX WTI crude for October delivery settled up $0.29, or 0.32%, at $91.30 bbl, after racing to a six-week high of $93.14 bbl earlier.
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ICE Brent crude for November settled down $0.11, or 0.1%, at $95.52 bbl. It rose to as high as $97.62 bbl during the session, a peak since mid-July.
Downstream, NYMEX ULSD for October delivery eased $0.0886, or 1.89%, to finish at $4.5936 gallon. RBOB for October advanced $0.0311, or 1.00%, to end the session at $3.1349 gallon.
By 2:30 p.m. EDT, the U.S. Dollar Index slid 0.672 points to 98.880 against a basket of currencies.
The rally earlier in the day came after civilian casualties and infrastructure damage were reported across Iranian coastal regions near the Strait of Hormuz following an overnight U.S. bombardment. Iran said those killed and wounded included people at a wedding.
Physical energy transits through the Hormuz remain volatile amid the six-month conflict. Preliminary vessel-tracking data showed four to six oil-laden tankers navigated the chokepoint between Tuesday and Wednesday, well below the 10-day average of 13 daily transits -- despite U.S. Energy Secretary Chris Wright noting a transient surge of 17 million bbl on Monday.
Trump hinted on Wednesday that the current hostilities might not drag on. "I don't think too long," he told reporters when asked to give a timeframe for the escalation.
Tehran expanded its maritime enforcement list Thursday, warning that non-compliant commercial vessels attempting passage through the waterway face fines or cargo confiscation. Outside the Hormuz chokepoint, Iraqi crude exports rose to 2.34 million bpd in August from 1.35 million bpd in July on discounted pricing, with September volumes expected to expand further as Iranian authorities permit select Iraqi tanker transits.
Fundamental support also stemmed from domestic inventory data showing U.S. commercial crude stocks fell by 4.5 million bbl last week, marking the first draw in five weeks. Downstream stocks offered a mixed picture, with gasoline inventories falling by 1.2 million bbl while distillate stocks rose by 800,000 bbl.
Traders are also monitoring OPEC+, which is expected to hold output policy unchanged at its Sunday meeting after completing the scheduled unwinding of a 1.65 million bpd layer of voluntary production cuts.