Oil Rises as Supply Disruptions Show No Signs of Easing


   
Karim Bastati
DTN Analyst

   VIENNA (DTN) -- Oil prices advanced for a second day Thursday (9/24) morning 
amid stalling progress in U.S.-Iran talks and signs that the disruption to 
Saudi Red Sea crude oil supply may last longer than initially expected.

   By 08:54am ET, ICE Brent for November delivery was up $1.99 to trade near 
$105.07 bbl, and NYMEX WTI for November delivery rose $1.53 to $93.69 bbl.

   Downstream, NYMEX ULSD for October delivery advanced $0.1189 to $4.8953 
gallon, and front-month RBOB futures edged higher by $0.0228 to $3.6098 gallon.

   The US dollar index strengthened by 0.21 points to 101.02 against a basket 
of foreign currencies.

   U.S. and Iranian diplomats this week held their first talks since June on 
the sidelines of the U.N. General Assembly in New York, with signals suggesting 
little willingness to reach a ceasefire. On Thursday, reports that Tehran gave 
the U.S. a one-week ultimatum to lift its naval blockade also supported prices.

   Oil futures rallied Wednesday on rumors that the White House was considering 
a 90-day diesel export ban, overshadowing a weekly U.S. inventory report 
showing commercial crude oil stockpiles expanding by some 3 million bbl.

   High international demand amid a global supply tightness has over the past 
months put additional strain on already low distillate fuel oil inventories, 
with exports during this period running around 400,000 bpd higher than last 
year. Nationwide ultra-low sulfur diesel inventories fell by 600,000 bpd last 
week, widening the gap to year-ago levels to 14%, according to Energy 
Information Administration data released Wednesday.

   Middle Eastern oil supply disruptions, meanwhile, showed little signs of 
easing. Saudi Aramco this week extended the suspension of shipments from Yanbu 
to Europe into November. Oil exports from the Red Sea port, a vital workaround 
to the blockade of the Strait of Hormuz, have dried up since drone strikes 
damaged the East-West pipeline. Iran continued to enforce its blockade, with 
independent observers on Thursday reporting that yet another oil tanker was 
struck near the oil choke point.

    




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