Crude Falls on Iran Diplomacy Hopes
by Bloomberg | A. Longley, B. Wang, N. Risser
click here to read this article at Rigzone.com
*this article was not written by Roseland Oil & Gas
Oil fell as Saudi exports through Hormuz increased and hopes grew for diplomatic progress in the Iran war.
Oil fell, settling near $100 a barrel, on signs Saudi Arabia is boosting exports via the key Strait of Hormuz and fresh hopes for diplomatic progress in the Iran war.
Brent, the global benchmark, declined for a fourth session, settling 3.4% lower. The October West Texas Intermediate contract, which expires on Tuesday, fell about 4.5%.
Satellite data showed that Saudi Arabia’s observed oil loadings from inside the Persian Gulf jumped over the weekend, with the highest number of ships seen at the nation’s main Persian Gulf port since June. The images indicate that the kingdom is successfully redirecting its exports back toward the Gulf following the shutdown of its vital East-West pipeline due to drone attacks.
Energy infrastructure is increasingly caught in the crosshairs of the conflict. Ukraine has also been pounding Russian refineries, leaving investors worried it could take a long time for repairs and a full return to normal in both the Middle East and Europe.
The Trump administration has proposed investing $5 billion in a new fund to help Middle East countries rebuild energy infrastructure battered in the Iran war, the Wall Street Journal reported.
Meanwhile, the US president told Fox News he would “probably” be open to meeting his Iranian counterpart, Masoud Pezeshkian, on the sidelines of the UN General Assembly in New York this week. Trump will also hold a summit with Chinese President Xi Jinping. China is the world’s top importer of oil, and provides Tehran with an economic lifeline as its biggest buyer. The US is seeking to step up pressure on Tehran’s trading partners.
Oil prices are up more than 65% this year, while diesel remains at the epicenter of the global fuels crunch, notching a fresh high over $6.50 a gallon at US pumps. The war-driven energy price spikes have re-stoked global inflation worries and are a liability to Trump’s Republican party ahead of midterm elections. Diesel futures settled down about 3% on Monday.
Crude and liquefied natural gas flows through Hormuz, the world’s most important energy chokepoint, are running at a six-month high in the past two weeks, according to Admiral Brad Cooper, head of US Central Command. About 32 ships a day have crossed Hormuz with US assistance from Sept. 17 to Sept. 19, according to UK Maritime Trade Operations, a naval group that liaises between the military and merchant shipping in the region.
“Focus has shifted to improving oil and LNG flows through Hormuz and the possibility of diplomatic progress on the sidelines of the UN General Assembly in New York,” said Arne Lohmann Rasmussen, chief analyst at A/S Global Risk Management. “The worst pressure on crude may be easing.”
Supply risks remain in the Middle East. Saudi Arabia issued air-raid alerts for Riyadh over the weekend — the first in the capital since the height of the US-Iran war in March and April — as well as warnings in Red Sea hubs including Yanbu. The kingdom has been facing threats from Iran-backed Houthis in Yemen
Oil Prices
- WTI for October delivery fell 4.5% to trade at $95.78 a barrel in New York
- Brent for November settlement fell 3.4% to trade at $100.34 a barrel
Libya’s largest oil field also reduced output significantly after a pipeline was shut by an “armed group,” the National Oil Corporation said in a post on Facebook. “The continuation of this closure will lead to the halt of production, transportation, and export operations of the Sharara field, which will lead to a direct impact on the national economy, especially with the rise in global oil prices,” it said.
by Bloomberg | A. Longley, B. Wang, N. Risser
click here to read this article at Rigzone.com
*this article was not written by Roseland Oil & Gas