Oil Pulls Back on Saudi Oman Relief, Fed Concerns


   
Barani Krishnan
DTN Refined Fuels Market Reporter

   SECAUCUS, NJ (DTN) -- Oil prices slipped Wednesday (9/16) on reports that 
Saudi Aramco was using ship-to-ship transfers at Oman's Sohar port to supply 
Asian crude buyers, offsetting some of the export losses caused by damage to 
its East-West pipeline. 

   An American Petroleum Institute (API) report on Tuesday (9/15) indicating 
U.S. oil inventories had risen across the board last week added to the weight 
of the market, which braced for the possibility of the trend being reinforced 
in official data due at 10:30 a.m. ET from the U.S. Energy Information 
Administration (EIA). 

   The API said crude stocks rose by 7.1 million bbl -- versus trade 
expectations for a 1.6 million bbl draw -- during the week ended September 11, 
dwarfing gains in gasoline and distillate balances.

   Energy futures were also weakened by traders' concerns that the Federal 
Reserve would announce its first rate hike in three years when the central bank 
reveals at 2:00 p.m. ET the outcome of a two-day policy meeting aimed at 
bringing under control soaring U.S. inflation.

   By 8:37 a.m. ET, NYMEX WTI crude for October delivery fell $2.08, or 1.92%, 
to $103.75 bbl. The session high was $105.63.

   ICE Brent for November delivery moved down $1.38, or 1.24%, to $107.37 bbl. 
It reached as high as $108.59 earlier in the day.

   Downstream, NYMEX ULSD for October delivery climbed $0.0063, or 0.12%, to 
$5.2683 gallon. It peaked at $5.2968 during the session.

   RBOB for October retreated $0.0317, or 0.91%, to $3.4335 gallon. The high 
for the day was $3.4733.

   The U.S. dollar index gained 0.114 points to 99.455 against a basket of 
currencies.

   In the Middle East, news that Saudi Arabian oil exports have found a 
temporary fix via the Gulf of Oman tempered immediate supply concerns. 

   Saudi Arabia suspended operations at its Red Sea export terminal at Yanbu 
this week after strikes by Iran-aligned Houthi rebels on its 7 million bpd 
East-West pipeline. The cancellation of multiple European cargo deliveries 
following the attacks has driven European gasoil futures to near historical 
highs, reflecting the dire global shortage of middle distillates.

   Arab Light, Medium and Heavy were among grades loaded via ship-to-ship 
transfers at Oman's Sohar port, according to media reports which described the 
arrangement as a lifeline for Saudi Arabia as the Strait of Hormuz remains 
largely inaccessible due to the ongoing Iran-U.S. war.

   Cargo trackers reported less than five vessel transits on the Hormuz on 
Tuesday (9/15), versus the more than hundred noted once on the waterway that 
served roughly 20% of global crude and LNG movements prior to the outbreak of 
the Iran-U.S. war in March.




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