WTI Back Above $100 on Saudi Attack, U.S. Inventory Draws


   
Barani Krishnan
DTN Refined Fuels Market Reporter

   SECAUCUS, NJ (DTN) - Crude futures were back in rally mode Wednesday 
(10/28), with WTI recapturing the $100 bbl foothold it lost a day ago, as 
heightened Houthi missile strikes on Saudi Arabia's primary export 
infrastructure threatened critical global supply flows.

   The price rebound was also underpinned by weekly inventory data from the 
Energy Information Administration (EIA) showing U.S. crude balances at a 
12-week low and emergency crude stocks at a 44-year bottom. Distillates 
hovering near a four-month low provided impetus to futures in downstream 
markets, even as gasoline inventories rose.

   The Federal Reserve's decision after a two-day meeting to hold U.S. interest 
rates unchanged in a range of between 3.75-4.00% was another positive for 
energy markets, which typically react adversely to the impact of costlier 
borrowings on businesses. 

   NYMEX WTI crude for December delivery rose $2.88, or 2.88%, to settle at 
$102.78 bbl, after rising to $103.55 during the session. 

   ICE Brent for December delivery moved up $1.44, or 1.26%, to close at 
$115.32 bbl. The session high was $116.51. 

   That came after the EIA said commercial crude oil inventories fell by 1.9 
million bbl to 410.6 million bbl during the week ended October 23, reaching 
their lowest level since July 31. Emergency crude in the Strategic Petroleum 
Reserve declined by 100,000 bbl to 282.6 million bbl, the lowest since October 
1982.

   Downstream, NYMEX ULSD for November delivery climbed $0.0400, or 0.84%, to 
finish at $4.8152 gallon. It peaked at $4.8573 for the day. 

   RBOB for November advanced $0.0358, or 1.14%, to end the session at $3.1734 
gallon. It hit an intraday high of $3.1852.

   Those moves followed the EIA's reporting of a nationwide drop of 1.5 million 
bbl in distillate fuel inventories to 102.8 million bbl. In the Midwest region, 
particularly, gasoline balances plunged by 1.3 million bbl to a record low of 
41.0 million. Gasoline stocks across the U.S., meanwhile, increased by 3.9 
million bbl to 209.2 million bbl. 

   The U.S. dollar index gained 0.003 points to 102.165 against a basket of 
currencies, placing a minor cap on broader commodity gains. 

   Supply anxieties also grew on the global front as Houthi forces claimed a 
ballistic missile strike on Saudi Aramco's 550,000-bpd Ras Tanura facility that 
reportedly led to a terminal fire. Ras Tanura serves as one of Saudi Arabia's 
two primary crude export terminals and houses the kingdom's largest refinery, 
which is a vital diesel source for European markets. 

   The latest Houthi strike followed weeks of attacks by the rebels targeting 
the larger Saudi western energy corridor, which has included the Red Sea port 
of Yanbu and the East-West pipeline pumping station.




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