Oil Rises as Hormuz Traffic Slows Amid Fresh Strikes


   
Karim Bastati
DTN Analyst

   VIENNA (DTN) -- Oil futures rose more than 4% Monday (7/13) morning after 
the U.S. and Iran exchanged fresh attacks over the weekend, fueling concerns 
over a further military escalation and a renewed supply disruption as traffic 
through the Strait of Hormuz slowed to multi-week lows.

   By 08:30am ET, ICE Brent for September delivery was up $3.09 to trade near 
$79.10 bbl, and NYMEX WTI for August delivery rose $2.87 to $74.28 bbl.

   Downstream, NYMEX ULSD futures for August delivery advanced $0.1422 to 
$3.6955 gallon, and front-month RBOB futures rose $0.0855 to $3.0701 gallon.

   The US dollar index was little changed, up 0.025 points to 100.78 against a 
basket of foreign currencies.

   This most recent flare-up in hostilities, the most intense since last 
month's ceasefire extension, reached its apex on Sunday amid a barrage of U.S. 
strikes on military sites and Iranian attacks on U.S. bases and energy 
infrastructure in neighboring countries.

   Tehran on Sunday pronounced the Strait of Hormuz closed, while Washington 
insisted that tankers were transiting via a parallel U.S.-protected corridor 
along the Omani coast. Ship traffic data showed that flows this weekend fell to 
their lowest in five weeks. Observable crossings have almost completely ceased, 
while a handful of tankers attempted to traverse the chokepoint with 
transponders turned off.

   The resurgence of fighting fueled concerns over the trajectory of the 
current supply recovery of Middle Eastern oil. The Organization of the 
Petroleum Exporting Countries in their most recent monthly report published on 
Monday said that crude oil output from the producer group and its allies, 
including former member UAE, last month rose by 3 million bpd from May. At 
14.08 million bpd, however, combined Iraqi, Kuwaiti, Saudi and Emirati crude 
output was still lagging pre-war levels by some 6.2 million bpd, or 30.7%.




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