Oil in 2nd Straight Weekly Gain Amid Hormuz Strain


   
Barani Krishnan
DTN Refined Fuels Market Reporter

   SECAUCUS, NJ (DTN) -- Crude and oil products futures posted a second 
straight weekly gain despite a price dip Friday (9/11) 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.

   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 (9/10) 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. ET, 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 towards 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.




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