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Express Tribune
14-06-2025
- Business
- Express Tribune
Diesel most exposed to Mideast conflict
Listen to article US ultra-low sulphur diesel futures hit the highest level since February, outpacing gains in oil and gasoline as analysts warned that diesel supply is the most exposed to the conflict in the Middle East. Israel on Friday launched the biggest-ever direct attack on Iran and said the huge wave of airstrikes was only the start of its campaign. Iran has since launched retaliatory strikes, with explosions heard over Tel Aviv and Jerusalem. Crude oil futures jumped about 7% as analysts worried Iran's response could include a blockade of the Strait of Hormuz, through which a fifth of global oil supplies traverses. Diesel futures jumped even more, surging about 8% for their biggest single-day gains since April 2022. Diesel outperformed because the conflict's biggest impact is expected to be on the supply of medium heavy-sour crude grades, which are better suited for production of distillate fuels, StoneX oil analyst Alex Hodes said. The Middle East is also a major export hub for distillate fuels like diesel, gasoil and jet fuel, said Matias Togni, analyst at oil market insights firm Next Barrel. The conflict could impact liquefied natural gas (LNG) flows within the region and lead to higher diesel and fuel oil consumption for power generation, with Egypt already showing signs of such a switch, Togni said. Combined diesel, gasoil and jet fuel exports from the Middle East averaged 1.76 million barrels per day in May, close to 2% of total world oil consumption, according to Kpler data. Retail spike to follow Existing inventories for diesel are already low, adding to concerns that the conflict will lower Middle East diesel exports and global production, said StoneX's Hodes. US inventories of diesel and heating oil stood at 108.9 million barrels in the week ended June 6, about 15% below the past five years' average, US Energy Information Administration (EIA) data showed. Combined with the surge in crude oil prices, those tight inventories are likely to cause a 10-to-30-cent a gallon surge in retail diesel prices in the US over the next two weeks, GasBuddy analyst Patrick De Haan said. By contrast, US gasoline stocks were slightly above the five-year average at 214.7 million barrels, the EIA data showed. GasBuddy is estimating a five-to-15-cent per gallon jump in US gasoline prices over the coming weeks. US gasoline futures rose 8.47 cents to settle at $2.2276 a gallon on Friday, while ULSD futures rose 17 cents to settle at $2.3587 a gallon. Traders pile into $80 oil bets Traders on Friday exchanged the most $80 West Texas Intermediate (WTI) crude oil call options since January, expecting more upside to prices after Israeli airstrikes on Iran sparked fears of a wider Middle East conflict. Call options grant the holder a right to buy futures contract at the pre-set price and date and a rise in volumes can help gauge market sentiment. About 33,411 contracts of August-2025 $80 call options for WTI crude oil were traded on Friday on a total trading volume of 681,000 contracts, marking the highest volume for these options this year, according to CME Group data The last time trading was this high for $80 call contracts was on January 10, with 17,030 February-2025 $80 call options traded on a total trading volume of 301,866 contracts. Oil prices jumped on Friday and settled 7% higher as Israel and Iran launched airstrikes, feeding investor worries that the combat could widely disrupt oil exports from the Middle East. US WTI crude finished at $72.98 a barrel, up $4.94, or 7.62%. During the session, the WTI jumped over 14% to its highest since January 21 at $77.62.
Business Recorder
13-06-2025
- Business
- Business Recorder
Oil prices drop as traders gauge ME tensions
NEW YORK: Oil prices edged lower on Thursday, as traders assessed whether the previous day's jump to the highest prices in more than two months had adequately priced in risks for crude oil supply from mounting tensions in the Middle East. Brent crude futures were down 34 cents, or 0.5%, at $69.43 a barrel at 11:32 a.m. ET (1532 GMT). US West Texas Intermediate crude fell 18 cents, or 0.3%, to $67.97 a barrel. On Wednesday, the US decided to move personnel out of the Middle East, and both benchmarks surged more than 4% to their highest since early April. The surge put the market in overbought territory based on several technical indicators, so it was likely due for a brief correction, StoneX Energy analyst Alex Hodes said. On Wednesday, US President Donald Trump said he was growing less confident that Tehran would agree to stop enriching uranium, a key demand in US talks with Iran over its nuclear program. Trump has previously threatened to strike Iran if the talks fail. Tehran, which asserts its nuclear activity is for peaceful purposes, has said it would retaliate against strikes by hitting US bases in the region. Iran will not abandon its right to uranium enrichment, a senior Iranian official said on Thursday.
Business Times
12-06-2025
- Business
- Business Times
Oil settles lower as traders gauge Middle East tensions
[NEW YORK] Oil prices settled slightly lower on Thursday as traders booked profits from a 4 per cent rally in the prior session, driven by concerns that worsening tensions in the Middle East could cause supply disruptions. Brent crude futures settled down 41 cents, or 0.6 per cent, at US$69.36 a barrel. US West Texas Intermediate crude fell 11 cents, or 0.2 per cent, to settle at US$67.97 a barrel. US President Donald Trump on Thursday said an Israeli strike on Iran 'could very well happen,' but added that he would not call it imminent and prefers to avoid conflict. The US had earlier decided to move personnel out of the Middle East, sending both crude oil benchmarks up more than 4 per cent to their highest since early April on Wednesday. The surge put the market in overbought territory based on several technical indicators, so it was likely due for a brief correction, StoneX Energy analyst Alex Hodes said. US and Iranian officials were scheduled to hold a sixth round of talks on Tehran's uranium enrichment programme in Oman on Sunday, according to officials from both countries and their Omani mediators. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Trump has repeatedly threatened strikes against Iran if the nuclear talks fail to reach an agreement. Tehran, which asserts its nuclear activity is for peaceful purposes, has said it would retaliate against strikes by hitting US bases in the region. Rising tensions in the region have oil traders worried about possible supply disruptions. Britain's maritime agency warned on Wednesday that increased tensions in the Middle East may escalate military activity and impact shipping in critical waterways. 'For the oil market, the absolute nightmare is a closure of the Strait of Hormuz,' Arne Rasmussen, an analyst at Global Risk Management, said in a LinkedIn post. 'If Iran blocks this narrow chokepoint, it could affect up to 20% of global oil flows,' he added. JPMorgan said oil prices could surge to US$120 to US$130 a barrel if the Strait of Hormuz were to be shut, a scenario the bank considered to be severe but a low risk. Still, oil traders were growing cautious. 'We are still higher than two days ago as some short investors prefer to stay on the sidelines amid the uncertainty,' said Giovanni Staunovo, an analyst at UBS. US special envoy Steve Witkoff plans to meet Iranian Foreign Minister Abbas Araghchi in Oman on Sunday to discuss Iran's response to a US proposal for a deal. The UN nuclear watchdog's 35-nation Board of Governors declared Iran in breach of its non-proliferation obligations on Thursday for the first time in almost 20 years, raising the prospect of reporting it to the UN Security Council. REUTERS
Business Recorder
21-05-2025
- Business
- Business Recorder
Oil prices ease on geopolitical uncertainty
NEW YORK: Oil prices fell on Tuesday due to uncertainty in US-Iran negotiations and Russia-Ukraine peace talks, while new government data delivered a cautious outlook for top crude-importer China's economy. Brent futures were down 42 cents, or 0.6%, to $65.12 a barrel at 11:02 a.m. EDT (1502 GMT), while US West Texas Intermediate (WTI) crude slid 26 cents, or 0.4%, to $62.43. Iran's Supreme Leader Ayatollah Ali Khamenei said US demands that Tehran stop enriching uranium are 'excessive and outrageous,' voicing doubts whether talks on a new nuclear deal will succeed. Iran was the third-biggest crude producer in the Organization of the Petroleum Exporting Countries (OPEC) group in 2024 behind Saudi Arabia and Iraq, according to US federal energy data. A deal between Iran and the US would allow Iran to raise oil exports by 300,000 to 400,000 barrels per day if sanctions were eased, StoneX analyst Alex Hodes said. The European Union and Britain announced new sanctions against Russia without waiting for the US to join them, a day after US President Donald Trump spoke to Russian President Vladimir Putin without winning a promise for a ceasefire in Ukraine. Ukraine wants the Group of Seven (G7) advanced economies to reduce their price cap on Russian seaborne oil to $30 per barrel. The current G7 cap, imposed over Russia's war in Ukraine, is $60. 'An immediate resolution of the Russia/Ukraine war does, however, look unlikely. So while it could lead to more oil from Russia into the market, it is out in time and uncertain as Russia is still bound by its obligation to OPEC+,' said Bjarne Schieldrop, chief commodities analyst at SEB, a Nordic bank. An agreement to end the war between Russia and Ukraine could allow Moscow to export more oil to the world.
Business Times
20-05-2025
- Business
- Business Times
Oil prices little changed on geopolitical uncertainty, weak China demand signals
[NEW YORK] Oil prices were little changed on Tuesday (May 20) due to uncertainty in US-Iran negotiations and Russia-Ukraine peace talks, while new government data delivered a cautious outlook for top crude importer China's economy. Brent futures slid 16 US cents, or 0.2 per cent, to settle at US$65.38 a barrel, while US West Texas Intermediate (WTI) crude slid 13 US cents, or 0.2 per cent, to settle at US$62.56. Iran's Supreme Leader Ayatollah Ali Khamenei said US demands that Tehran stop enriching uranium are 'excessive and outrageous', voicing doubts whether talks on a new nuclear deal will succeed. A deal between Iran and the US would allow Iran to raise oil exports by 300,000 to 400,000 barrels per day if sanctions were eased, StoneX analyst Alex Hodes said. Iran was the third-biggest crude producer in the Organization of the Petroleum Exporting Countries (Opec) group in 2024 behind Saudi Arabia and Iraq, according to US federal energy data. The European Union and Britain announced new sanctions against Russia without waiting for the US to join them, a day after US President Donald Trump spoke to Russian President Vladimir Putin without winning a promise for a ceasefire in Ukraine. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Ukraine wants the Group of Seven (G7) advanced economies to reduce their price cap on Russian seaborne oil to US$30 per barrel. The current G7 cap, imposed over Russia's war in Ukraine, is US$60. 'An immediate resolution of the Russia/Ukraine war does, however, look unlikely. So while it could lead to more oil from Russia into the market, it is out in time and uncertain as Russia is still bound by its obligation to Opec+,' said Bjarne Schieldrop, chief commodities analyst at SEB, a Nordic bank. An agreement to end the war between Russia and Ukraine could allow Moscow to export more oil to the world. Russia is a member of the Opec+ group of countries, which includes Opec and other producers. Russia was the world's second-biggest crude producer behind the US in 2024, according to US federal energy data. Chinese data At least seven Federal Reserve officials are scheduled to speak on Tuesday. Traders currently expect the US central bank to deliver at least two 25-basis-point interest rate cuts in 2025, with the first expected in September, according to data compiled by financial services firm LSEG. Central banks such as the Fed use interest rates to keep price inflation in check. Lower interest rates can spur economic growth and demand for oil by reducing consumer borrowing costs. Data showing decelerating industrial output growth and retail sales in China piled more pressure on oil prices, with analysts expecting a slowdown in fuel demand from the world's top oil importer. The analysis, however, did not reflect a 90-day pause on tariffs between the US and China, with Goldman Sachs pointing to a pickup in China trade flows late on Monday. In Germany, the biggest economy in Europe, Finance Minister Lars Klingbeil promised swift measures to boost investment amid global trade uncertainty. US oil inventories The American Petroleum Institute trade group and the US Energy Information Administration are due to release US oil inventory data on Tuesday and Wednesday, respectively. Analysts forecast energy firms pulled about 1.2 million barrels of oil from US stockpiles during the week ended May 16. If correct, that would be the third decline in four weeks. There was an increase of 1.8 million barrels during the same week last year, with the average decrease at 3.5 million barrels over the past five years (2020 to 2024). REUTERS
