DTN Oil Update
Oil Steady Above $100 Bbl on Escalating Houthi Attacks
SECAUCUS, N.J. (DTN) -- Crude futures retreated from session highs Tuesday morning, remaining largely steady since the prior session's close, as escalating Houthi offensive actions in Saudi Arabia continue to maintain a formidable geopolitical risk premium across energy markets.
By 9:20 a.m. EDT, NYMEX WTI crude for October delivery rose $0.29, or 0.27%, to $101.68 bbl. The session high was $104.21.
ICE Brent for November delivery moved up $0.21, or 0.19%, to $105.89 bbl. It reached as high as $108.43 earlier in the day.
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Downstream, NYMEX ULSD for October delivery climbed $0.1584, or 3.06%, to $5.1199 gallon. It peaked at $5.1631 during the session.
RBOB for October advanced $0.0384, or 1.03%, to $3.3555 gallon. The high for the day was $3.4080.
The U.S. Dollar Index gained 0.199 points to 99.305 against a basket of currencies.
The Iran-aligned Houthi militia launched fresh strikes against Saudi infrastructure Monday while consolidating control along critical maritime positions on the Red Sea. The tactical expansion has enabled sustained disruptions against commercial shipping transiting the Bab el-Mandeb strait, directly threatening regional crude flows following last week's forced shutdown of Saudi Arabia's East-West pipeline.
Market analysts project the compounding infrastructure damage could disrupt an additional 4% to 5% of total global oil supplies.
Their expectation is that a solid floor will persist for crude prices in the $100 bbl territory until clearer visibility is available on Saudi export recovery timelines.
Diplomatic efforts also remain stalled as planned talks between Iran and Persian Gulf states on safe transit through the Strait of Hormuz were postponed without a rescheduled date.
Political friction further heightened as Tehran rejected U.S. President Donald Trump's claim that it was seeking a diplomatic resolution with Washington, with Iranian officials declaring there will be no truce until Washington adhered to terms of a lapsed June ceasefire agreement.
Oil market participants are also focused on supply data due at 4:30 p.m. EDT from the American Petroleum Institute for the week ended Sept. 11, which will serve as a precursor to official inventory figures from the Energy Information Administration on Wednesday.
In the prior week ended Sept. 4, the API reported a modest crude stock drawdown of 300,000 bbl, whereas official EIA data showed a slightly larger commercial crude draw of 400,000 bbl. Analysts expect the upcoming EIA report to show a further crude inventory decline of around 1.3 million bbl for the week ended Sept. 11, driven by steady refinery utilization and strong export demand.
Inventory numbers aside, crude futures are taking directions from broader financial markets as investors await the Federal Reserve's first anticipated rate hike in three years as the central bank tries to clamp down on persistent inflation. The Fed is expected to add 25 basis points to benchmark U.S. rates at the conclusion of a two-day policy meeting on Wednesday, bringing primary lending rates now in a range of between 3.50% and 3.75% to between 3.75% and 4.00%.