Oil Dips Pre-Holiday but Caps 8% Weekly Gain


   
Barani Krishnan
DTN Refined Fuels Market Reporter

   SECAUCUS, NJ (DTN) -- Oil prices retreated Friday (9/4) but remained on 
track for sharp weekly gains ahead of the Labor Day holiday as renewed 
U.S.-Iran hostilities sustained fears of prolonged supply disruptions through 
the Strait of Hormuz.

   By 8:50 a.m. ET, NYMEX WTI crude for October delivery fell $1.27, or 1.39%, 
to $90.03 bbl, though heading for an 8% weekly advance before Monday's market 
holiday. ICE Brent for November dipped by $1.08, or 1.13%, to $94.44 bbl, 
maintaining a 7% weekly gain.

   Downstream, NYMEX ULSD for October delivery eased $0.1081, or 2.35%, to 
$4.4855 gallon, up 5% on the week. RBOB for October retreated $0.0441, or 
1.39%, to $3.0908 gallon, pacing toward a 2% weekly rise.

   The U.S. dollar index gained 0.370 points to 99.250 against a basket of 
currencies, posing additional headwinds for dollar-denominated commodities.

   Weekly gains reflect heightening geopolitical risks following U.S. 
airstrikes against Iranian targets and Tehran's retaliatory drone and missile 
counterfire against U.S. positions across the Gulf region.

   U.S. Vice President JD Vance stated Thursday that Washington will not engage 
in diplomatic talks with Tehran until Iran halts attacks on commercial shipping 
in the Strait of Hormuz.

   Physical energy flows through the chokepoint remain severely constrained. 
Preliminary vessel-tracking data showed daily commodity tanker transits falling 
to single digits, well below the 10-day average of 13 transits.

   Prices also find underlying fundamental support from tightening domestic 
inventories. U.S. Energy Information Administration data showed commercial 
crude stocks fell 4.5 million bbl last week, marking the first inventory draw 
in five weeks.

   Traders are, meanwhile, turning their attention to Sunday's OPEC+ meeting, 
where the producer group is expected to leave October output policy unchanged 
after completing the scheduled unwinding of voluntary production cuts.

   In U.S. economic data, non-farm payrolls surged by 162,000 in August, far 
exceeding market expectations of a 56,000 gain. The U.S. Bureau of Labor 
Statistics reported Friday (9/4) that the national unemployment rate held 
steady at 4.1%.




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