WTI Joins Brent in $100 bbl Territory Amid Supply Crunch


   
Barani Krishnan
DTN Refined Fuels Market Reporter

   SECAUCUS, NJ (DTN) -- The world's two leading crude oil benchmarks both 
traded in $100 bbl territory Thursday (9/10), hitting multi-month highs, as 
escalating tanker attacks near the Strait of Hormuz and hawkish geopolitical 
signals from Washington fueled expectations of prolonged global oil supply 
shortfalls.

   Downstream, U.S. diesel futures broke past their previous war-driven record 
peak established in March.

   NYMEX WTI crude for October delivery rose $6.43, or 6.70%, to settle at 
$102.48 bbl, after soaring to $103.06, its highest since a May peak of $105.21.

   ICE Brent for November delivery moved up $6.42, or 6.3%, to settle at 
$107.63 bbl after running up to $108.42 bbl. The global crude benchmark 
returned to $100 territory on Wednesday, since an April peak of $114.70.  

   Among refined products, NYMEX ULSD for October delivery climbed $0.2565, or 
5.34%, to finish at $5.0575 gallon. The session high of $5.0782 set a new peak 
for ULSD since the outbreak of the Iran war in March.

   RBOB for October advanced $0.1826, or 5.69%, to end the session at $3.3932 
gallon.

   By 2:19 p.m. ET, the U.S. dollar index gained 23 points to 99.040 against a 
basket of currencies.

   Energy futures extended their strength from the start of this week after 
remarks from U.S. President Donald Trump on Wednesday (9/9) indicated the 
regional war could extend past the November midterm elections. That 
contradicted previous Trump administration statements that heralded a swift 
resolution to the conflict.

   Navigating the Strait of Hormuz has grown increasingly perilous after 
Iranian forces reported targeting 10 vessels near the transit corridor 
Wednesday in retaliation for earlier U.S. strikes against five Iranian tankers. 
The intensifying hostilities have further restricted Iranian crude exports 
while deterring commercial maritime transit through the chokepoint.

   Quantifying physical output losses across the region remains challenging. In 
its September Short-Term Energy Outlook released Wednesday, the U.S. Energy 
Information Administration (EIA) calculated that Middle East crude shut-ins 
expanded to 6.7 million bpd in August, up from 5 million bpd in July.

   Conversely, OPEC's monthly report published early Thursday estimated a 
slight month-over-month increase in August output based on secondary sources, 
as higher Iraqi volume offset declines in Saudi Arabia and Iran.

   Direct communication from Saudi Arabia painted a starker picture, with 
self-reported production plunging to a 36-year low of 6.24 million bpd in 
August from 8.14 million bpd in July. The International Energy Agency (IEA) is 
set to issue its August global supply figures on Friday (9/11).

   In weekly inventory data released on Thursday, the EIA reported that 
distillate fuel inventories increased for a second consecutive week during the 
week ended September 4, while gasoline and jet fuel stocks also built and 
commercial crude oil inventories edged down as refinery utilization remained 
high.

   Distillate fuel stocks increased by 2.1 million bbl to 106.3 million bbl 
during the profiled week, following the previous week's 800,000 bbl build.

   Gasoline inventories increased by 1.3 million bbl to 206.9 million bbl 
during the reference week, reversing the prior decline of 1.2 million bbl.

   Crude balances fell by 400,000 bbl to 424.1 million bbl during the profiled 
week and were 600,000 bbl, or 0.1%, below the 424.6 million bbl reported during 
the same week last year




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