Oil Begins September Higher on Renewed Hormuz Strikes


   
Barani Krishnan
DTN Refined Fuels Market Reporter

   SECAUCUS, NJ (DTN) -- Crude futures moved nearly 2% higher Tuesday (9/1) 
morning as renewed military exchanges between Washington and Tehran stoked 
supply disruption fears.

   By 9:10 a.m. ET, NYMEX WTI crude for October delivery rose $2.43, or 2.86%, 
to $88.19 bbl. ICE Brent for November delivery moved up $2.23, or 2.43%, to 
$92.72 bbl.

   Downstream, NYMEX ULSD for October delivery climbed $0.1460, or 3.36%, to 
$4.5566 gallon. RBOB for October advanced $0.0543, or 1.72%, to $3.1313 gallon.

   The U.S. dollar index moved up 0.175 points to 99.560 against a basket of 
currencies.

   Crude futures' advance on the first trading day of September recouped most 
of their losses last week as escalated hostilities in the Middle East erased 
recent hopes for a diplomatic breakthrough.

   Physical risks to regional energy infrastructure escalated Monday after two 
supertankers carrying Saudi crude were hit by unknown projectiles within 
minutes of each other in the Strait of Hormuz. Ship tracking data showed 
visible commodity transits through the chokepoint held at roughly five vessels 
on Monday, well below the 10-day average of 14.

   None of the five vessels recorded transiting the waterway on Monday were 
liquid tankers, underscoring severe caution among commercial fleet operators.

   Market participants caution that the sudden military escalation deals a blow 
to short-term prospects for establishing a safe, managed transit corridor 
through the strait.

   President Donald Trump warned Monday (8/31) of additional strikes against 
Iranian targets following the first direct military engagement between the two 
nations since late July. The escalation marks a sharp turn from last week, when 
the conflict briefly shifted toward economic sanctions and regional diplomatic 
talks.

   Iranian President Masoud Pezeshkian stated Tuesday that Tehran would 
immediately return to its obligations if Washington honored commitments made 
under June's interim agreement. However, ongoing mediation efforts led by Qatar 
and Oman to reopen the Strait of Hormuz remain inconclusive.

   Traders are expected to be focused later in the day on U.S. petroleum 
inventory data for the week ended August 28 from the American Petroleum 
Institute, ahead of official statistics for the same period due on Wednesday 
(9/2) from the U.S. Energy Information Administration.




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