DTN Oil Update
Oil Resumes $100 bbl Rally as Saudi Oil Facilities Hit
SECAUCUS, NJ (DTN) - Crude futures rallied anew Monday (9/14) from the prior session's losses to remain in $100 bbl territory amid Houthi strikes on Saudi Arabia's oil infrastructure.
The run-up was muted though by U.S. President Donald Trump's suggestion once again that Iran was ready to do a deal to end its conflict with Washington -- despite there being no corroborating reports from Tehran.
NYMEX WTI crude for October delivery rose $1.34, or 1.34%, to settle at $101.39 bbl, after soaring to $104.95 earlier in the day, its highest since a May 21 peak of $105.28. October WTI fell 2.37% Friday (9/11) despite rising 9% on the week.
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ICE Brent crude for November delivery settled up $1.07, or 1%, at $105.68 bbl. On Thursday, it rallied to $109.68, its highest since a May 15 peak of $109.75. Like WTI, the Brent front-month slid 2.81% on Friday while rising 9% on the week.
Downstream, NYMEX ULSD for October delivery eased $0.0022, or 0.04%, to finish at $4.9615 gallon. For last week, it rose almost 10%.
RBOB for October advanced $0.0099, or 0.30%, to end the session at $3.3171 gallon. It climbed 3% last week.
By 2:43 p.m. ET, the U.S. dollar index gained 0.61 points to 99.720 against a basket of currencies.
Crude futures pulled away from Friday's downside as Houthi drone strikes forced the shutdown of Saudi Arabia's East-West pipeline, which typically transports 4 million bpd of crude to export terminals on the Red Sea to circumvent Iran's blockade of the Strait of Hormuz. Should the pipeline remained down beyond this week, up to 4% of global supply could be at risk, oil buyers and traders reportedly cautioned.
While exports from Saudi Arabia's Red Sea port of Yanbu continued Monday by drawing on storage reserves, analysts note the facility's 35 million bbl capacity provides only a narrow buffer. Tankers are unlikely to be filled to maximum capacity, leaving a window of under nine days to sustain current export rates.
Riyadh has not specified a repair timeline for the pipeline, describing the closure as temporary. Satellite imagery revealed severe damage, however, across multiple pump stations on the 745-mile line, media reports said.
Houthi forces also seized key positions around Bab el-Mandeb, threatening shipping routes connecting the Red Sea to the Indian Ocean. The militia has repeatedly targeted Saudi tankers since July, forcing vessels bound for Asia into circuitous, costly detours around Africa.
Pipeline damage combined with Houthi control over Bab el-Mandeb risks severing flows to buyers east of the Suez Canal, even if the East-West pipeline resumes operations quickly. Proposed talks between Tehran and Gulf states on a new safe corridor through the Hormuz were postponed, leaving risks elevated.