DTN Oil Update
Oil Rallies Deeper Into $100 Zone Amid Saudi Crisis
SECAUCUS, N.J. (DTN) -- Crude futures extended their rally Tuesday as escalating Houthi offensive actions in Saudi Arabia raised the geopolitical risk premium across energy markets.
NYMEX WTI crude for October delivery rose $4.49, or 4.43%, to settle at $105.88 bbl, after soaring to $106.75 during the session.
ICE Brent for November delivery moved up $3.00, or 2.80%, to settle at $108.68 bbl. The session high was $109.45.
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Downstream, NYMEX ULSD for October delivery climbed $0.2868, or 5.80%, to finish at $5.2483 gallon. It peaked at $5.2842 for the day.
RBOB for October advanced $0.1507, or 4.58%, to end the session at $3.4678 gallon. It reached $3.4752 earlier.
U.S. retail fuel prices matched the momentum in NYMEX fuel futures, with diesel at pumps reaching a new national record of $6.285 gallon while gasoline hit four-month highs of $4.319.
On the currency front, the U.S. Dollar Index gained 0.254 points to 99.360 against a basket of currencies.
Energy markets remained upbeat as Iran-aligned Houthi forces kept up their hostilities against Saudi energy infrastructure while consolidating their hold on critical Red Sea maritime positions. The tactical moves reinforce ongoing shipping disruptions through the Bab el-Mandeb strait following last week's operational shutdown of Saudi Aramco's East-West pipeline.
Market analysts estimate the cumulative infrastructure damage could take an additional 4% to 5% of global crude supplies offline, establishing a firm price floor in $100 bbl territory until Saudi export timelines become clearer.
Diplomatic avenues remain stalled. Planned discussions between Tehran and Persian Gulf nations regarding safe transit through the Strait of Hormuz were indefinitely postponed. Meanwhile, Iranian officials rejected U.S. President Donald Trump's assertions of active diplomatic talks with Washington, insisting no truce will occur until the U.S. abides by the terms of a lapsed June ceasefire agreement.
Energy traders are also monitoring weekly supply metrics from the American Petroleum Institute, due at 4:30 p.m. EDT Tuesday, ahead of official inventory numbers from the Energy Information Administration on Wednesday (9/16). For the week ended Sept. 4, the API cited a 300,000 bbl crude drawdown, compared to the EIA's reported 400,000 bbl draw. Consensus expectations point to a further 1.3 million bbl decline in EIA crude stocks for the week ended Sept. 11, anchored by strong export demand and high refinery throughput.
Broader macroeconomic headwinds, meanwhile, continue to influence energy markets as investors position for the Federal Reserve's upcoming policy decision on Wednesday. The central bank is widely expected to enact its first interest rate hike in three years to tame stubborn inflation, raising the benchmark federal funds rate by 25 basis points from its current 3.50% to 3.75% band, up to 3.75% to 4.00%.