Oil Up Again on Gulf Escalations; WTI Rallies Above $96


   
Barani Krishnan
DTN Refined Fuels Market Reporter

   SECAUCUS, NJ (DTN) -- Oil prices finished higher for a second consecutive 
session Thursday (9/24) amid escalating Middle East hostilities, ongoing 
infrastructure bottlenecks and debate over U.S. fuel exports policy.

   Geopolitical risks flared anew in the Gulf after a Saudi-led coalition 
intercepted six ballistic missiles launched by Iran-backed Houthis toward 
energy installations in the kingdom. 

   The attack coincided with reports that Iranian diplomats issued a one-week 
ultimatum for the U.S. to lift its naval blockade, extinguishing hopes of a 
diplomatic breakthrough after talks this week on the sidelines of the U.N. 
General Assembly in New York.

   NYMEX WTI crude for November delivery rose $3.18, or 3.46%, to settle at 
$95.34 bbl, after soaring to $96.78 during the session. November WTI rose 
almost 2% in the prior session.

   ICE Brent for November delivery moved up $4.38, or 4.28%, to $107.46 bbl. 
The session high was $108.23.  November Brent also rose about 4% Wednesday 
(9/23).

   Downstream, NYMEX ULSD for October delivery eased $0.0404, or 1.17%, to 
finish at $4.7360 gallon. It peaked at $5.0614 for the session.

   RBOB for October retreated $0.0218, or 0.39%, to end the session at $3.5652 
gallon. It reached $3.6547 earlier in the day.

   By 3:12 p.m. ET, the U.S. dollar index gained 0.223 points to 101.035 
against a basket of currencies. 

   The drop in ULSD futures was driven by improving regional supply 
availability as ExxonMobil's 275,000 bpd Joliet refinery in Channahon, 
Illinois, began recovering and bringing units back online following recent 
power outage and flooding disruptions.

   RBOB also came under pressure as gasoline yields improved alongside 
distillates from the operational recoveries at Joliet. The return of regional 
processing capacity eased immediate spot supply concerns in PADD 2, leading 
cash desks to discount physical barrels despite a 500,000 bbl draw in regional 
inventories during the week ended September 18.

   Crude futures were supported by continuous supply constraints across key 
transit corridors. Saudi Aramco extended shipping suspensions from Yanbu into 
November as damage to the East-West Pipeline leaves Red Sea export routes 
severely choked, while observers reported another tanker strike near the Strait 
of Hormuz.

   On the U.S. policy front, Energy Secretary Chris Wright sought to calm 
market concerns by stating that the administration was not pursuing an outright 
ban on U.S. diesel exports. The government pivot came amid pushback from a 
coalition of more than 30 trade associations -- including the American 
Petroleum Institute (API) and the American Fuel & Petrochemical Manufacturers 
(AFPM) -- which warned that restricting foreign shipments would backfire by 
forcing refiners to curtail output and driving domestic prices higher.

   To address regional supply imbalances without resorting to trade bans, the 
coalition has urged the White House to extend and broaden Jones Act emergency 
waivers. Broadening waivers for foreign-flagged vessels allows Gulf Coast 
refiners to redirect surplus distillate supply directly to high-demand East and 
West Coast markets without running into domestic shipping bottlenecks.




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