Oil Futures Climb as Strait of Hormuz Risks Ease


   
Maria Eugenia Garcia
DTN Energy Editor

   HOUSTON, TX (DTN) -- Oil futures rose Thursday (8/27) after a four-day slide 
as traders assessed signs that the six-month Iran war may be easing supply 
risks with more vessels transiting the Strait of Hormuz, despite Washington's 
efforts to isolate the Iranian economy.

   Negotiations between Iran and Oman to establish a joint shipping corridor in 
the Strait of Hormuz, which would ease the crude supply disruption, were 
reportedly in the final stages. Officials from both countries on Wednesday 
signaled optimism about opening a shipping lane within the next 30 to 60 days.

   However, a global diesel supply crunch is adding upward pressure to 
ultra-low sulfur diesel (ULSD) futures contracts, with Russia, one of the 
biggest suppliers, facing domestic refinery outages and an export ban as 
intermittent Ukrainian attacks disrupt its refining system.

   In the U.S., the ongoing global refined product supply shortage has drawn 
down diesel stockpiles to the lowest seasonal level on record last week, the 
Energy Information Administration reported Wednesday. Distillate inventories 
fell to 93.6 million bbl, down 11% year-on-year, and more than 15% below the 
five-year seasonal average.

   The front-month ICE Brent futures contract showed the steepest price 
increase on the day, rising $2.17 bbl to $90.01 bbl, and the NYMEX WTI for 
October delivery increased $1.70 bbl to $83.93 bbl.

   Downstream, NYMEX ULSD for September delivery rose $0.0151 to $4.2751 
gallon, and front-month RBOB futures climbed  $0.0655 to $3.3856 gallon.

   The US dollar index edged up 0.006 points to 99.095 against a basket of 
foreign currencies.




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