Oil Resumes $100 bbl Rally as Saudi Oil Facilities Hit


   
Barani Krishnan
DTN Refined Fuels Market Reporter

   SECAUCUS, NJ (DTN) -- Crude futures rallied anew Monday (9/14) from the 
prior session's losses to remain in $100 bbl territory amid Houthi strikes on 
Saudi Arabia's oil infrastructure.

   The run-up was muted though by U.S. President Donald Trump's suggestion once 
again that Iran was ready to do a deal to end its conflict with Washington -- 
despite there being no corroborating reports from Tehran.

   NYMEX WTI crude for October delivery rose $1.34, or 1.34%, to settle at 
$101.39 bbl, after soaring to $104.95 earlier in the day, its highest since a 
May 21 peak of $105.28. October WTI fell 2.37% Friday (9/11) despite rising 9% 
on the week.

   ICE Brent crude for November delivery settled up $1.07, or 1%, at $105.68 
bbl. On Thursday, it rallied to $109.68, its highest since a May 15 peak of 
$109.75. Like WTI, the Brent front-month slid 2.81% on Friday while rising 9% 
on the week.

   Downstream, NYMEX ULSD for October delivery eased $0.0022, or 0.04%, to 
finish at $4.9615 gallon. For last week, it rose almost 10%.

   RBOB for October advanced $0.0099, or 0.30%, to end the session at $3.3171 
gallon. It climbed 3% last week.

   By 2:43 p.m. ET, the U.S. dollar index gained 0.61 points to 99.720 against 
a basket of currencies.

   Crude futures pulled away from Friday's downside as Houthi drone strikes 
forced the shutdown of Saudi Arabia's East-West pipeline, which typically 
transports 4 million bpd of crude to export terminals on the Red Sea to 
circumvent Iran's blockade of the Strait of Hormuz. Should the pipeline 
remained down beyond this week, up to 4% of global supply could be at risk, oil 
buyers and traders reportedly cautioned.

   While exports from Saudi Arabia's Red Sea port of Yanbu continued Monday by 
drawing on storage reserves, analysts note the facility's 35 million bbl 
capacity provides only a narrow buffer. Tankers are unlikely to be filled to 
maximum capacity, leaving a window of under nine days to sustain current export 
rates.

   Riyadh has not specified a repair timeline for the pipeline, describing the 
closure as temporary. Satellite imagery revealed severe damage, however, across 
multiple pump stations on the 745-mile line, media reports said.

   Houthi forces also seized key positions around Bab el-Mandeb, threatening 
shipping routes connecting the Red Sea to the Indian Ocean. The militia has 
repeatedly targeted Saudi tankers since July, forcing vessels bound for Asia 
into circuitous, costly detours around Africa.

   Pipeline damage combined with Houthi control over Bab el-Mandeb risks 
severing flows to buyers east of the Suez Canal, even if the East-West pipeline 
resumes operations quickly. Proposed talks between Tehran and Gulf states on a 
new safe corridor through the Hormuz were postponed, leaving risks elevated.




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