Oil Hits 6-Week Highs on Escalating Hormuz Tensions


   
Barani Krishnan
DTN Refined Fuels Market Reporter

   SECAUCUS, NJ (DTN) -- Crude futures hovered near six-week highs Thursday 
(9/3) morning amid escalating Middle East tensions from U.S. bombing of Iran 
and Israel's renewed threats of military strikes against Tehran.

   By 8:30 a.m. ET, NYMEX WTI crude for October delivery rose $1.08, or 1.19%, 
to $92.09 bbl. It earlier hit a six-week high of $93.14 bbl.

   ICE Brent crude for November delivery moved up $0.73, or 0.76%, to $96.36 
bbl. The session high was $97.62 bbl, a peak not seen since mid-July.

   Downstream, NYMEX ULSD for October delivery eased $0.0273, or 0.61%, to 
$4.6549 gallon. RBOB for October advanced $0.0027, or 0.05%, to $3.1065 gallon.

   The U.S. dollar index slid 0.467 points to 99.085 against a basket of 
currencies.

   Civilian casualties and infrastructure damage were reported across Iranian 
coastal regions near the Strait of Hormuz following an overnight U.S. 
bombardment. Iran said those killed and wounded included people at a wedding 
ceremony.

   The latest round of strikes marks the most significant direct exchange 
between Washington and Tehran since July, prolonging the multi-month Middle 
East conflict.

   Israeli Defense Minister Israel Katz stated that Israeli forces would target 
Iranian energy and military assets if Tehran carries out retaliatory strikes 
across the region.

   Physical transits by energy product-laden vessels through the Strait of 
Hormuz slowed further Thursday, with preliminary vessel tracking data showing 
six commodity tankers navigated the chokepoint on Wednesday. The single-digit 
count represents a sharp drop from 11 transits on Tuesday and sits well below 
the 10-day average of 13 daily transits.

   Tehran expanded its maritime enforcement list Thursday, warning that 
non-compliant commercial vessels attempting passage through the strait face 
fines, cargo confiscation, or vessel detention.

   Despite regional chokepoint restrictions, Iraqi crude exports reportedly 
rose to roughly 2.34 million bpd in August from 1.35 million bpd in July, 
supported by discounted pricing.

   Iraqi energy officials expect September export volumes to expand further as 
Iranian authorities allow select Iraqi tanker transits through the waterway.




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