DTN Oil Update
Oil in 2nd Straight Weekly Gain Amid Hormuz Strain
SECAUCUS, N.J. (DTN) -- Crude and oil products futures posted a second straight weekly gain despite a price dip Friday as elevated supply risks from expanding Middle East hostilities continued to underpin the market.
NYMEX WTI crude for October delivery fell $2.43, or 2.37%, to settle at $100.05 bbl, after soaring to $104.46, its highest since a May 21 peak of $105.28. For the week, however, it rose about 9%.
ICE Brent for November delivery moved down $3.02, or 2.81%, to close at $104.61 bbl. On Thursday, it rallied to $109.68, its highest since a May 15 peak of $109.75. Like WTI, the Brent front-month was up around 9% on the week.
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Among refined products, NYMEX ULSD for October delivery eased $0.0982, or 1.94%, to finish at $4.9593 gallon. October ULSD surged above $5 gallon on Thursday, Sept. 10, for the first time since the 2022 Russia-Ukraine war rally. For the week, it rose almost 10%.
Retail diesel prices in the U.S. climbed to record levels last week, with preliminary data indicating the national pump average was nearing $6 gallon as global middle distillate supplies tighten further.
NYMEX RBOB for October retreated $0.0860, or 2.53%, to end the session at $3.3072 gallon. It climbed 3% on the week.
By 2:20 p.m. EDT, the U.S. Dollar Index gained 0.063 points to 99.047 against a basket of currencies.
Friday's broad downside pressure on prices came after reports indicating Iran was negotiating with Gulf nations to create a jointly managed shipping corridor through the Strait of Hormuz.
Nevertheless, physical supply bottlenecks and threats to regional flows intensified, with maritime tracking data revealing daily vessel transits through the chokepoint fell back into single digits Thursday.
In Yemen, Tehran-aligned Houthi forces seized a port and island at Bab el-Mandeb -- the strategic entrance linking the Red Sea to the Indian Ocean -- heightening risks to Saudi oil exports. The group also initiated fresh strikes against Saudi Arabia on Thursday, targeting regions crossed by the kingdom's East-West pipeline that circumvents the Persian Gulf.
The Saudi energy ministry announced that the East-West pipeline was temporarily down after several attacks on Thursday. Separately, Iranian media reported that Tehran launched drones on Friday toward ships in the Hormuz.
The International Energy Agency (IEA), tracking the near-45% surge in crude prices since the second quarter, warned of accelerating demand destruction this year. In its monthly report released Friday, the Paris-based energy watchdog deepened its 2026 global demand contraction forecast to 2.5 million bpd from the 1.6 million drop it estimated for August.
However, the protracted conflict has dealt a heavier blow to the supply side, prompting the IEA to expand its projected 2026 global supply deficit to 1.74 million bpd from 1.27 million bpd.