October WTI crude oil (CLV26) is down -4.07 (-3.85%) today, and October RBOB gasoline (RBV26) is down -0.-0350 (-1.01%). Crude oil and gasoline prices are sharply lower today on signs that crude supplies are getting through the Strait of Hormuz, easing supply concerns. Losses in crude accelerated today after weekly EIA crude inventories fell less than expected and gasoline and distillate supplies rose more than expected.
Crude Oil Prices Sharply Lower as Middle East Disruptions Ease Why UBS Just Turned Bearish on NuScale Power Stock Crude Prices Soar as Global Oil Supplies Continue to Tighten Our exclusive Barchart Brief newsletter is your FREE midday guide to what's moving stocks, sectors, and investor sentiment - delivered right when you need the info most. Crude prices retreated today after US Energy Secretary Wright said 18 million bbl of crude oil and refined products went through the Strait of Hormuz on Tuesday, easing global supply concerns. Supply risks are underpinning crude oil prices as energy exports from the Middle East remain limited, tightening global supplies.
Crude rallied to a 3.75-month high on Tuesday on fears that global oil supplies will tighten further after Saudi Arabia shut down its key East-West pipeline, disrupting a key route that bypasses the Strait of Hormuz. The 750-mile-long East-West pipeline, which carries 7 million bpd of crude, was closed late last Friday as a precaution following attacks by Houthi rebels, and Saudi officials gave no indication of when it will reopen. The pipeline moves oil away from the Persian Gulf toward the Red Sea, where it can be loaded on tankers.
On Tuesday, Saudi Aramco said it is delaying oil deliveries to some European customers because of the pipeline closure. Crude also has support as Yemen's Houthi rebels target energy facilities in Saudi Arabia, forcing several oil facilities to halt production. Saudi Arabia said last Thursday that its crude production in August fell to 6.238 million bpd, the lowest since 1990.
The Houthi rebels captured the strategic Red Sea port city of Mokha last Thursday, 50 miles from the narrow Bab al-Mandab Strait at the southern end of the Red Sea, putting the group in a stronger position to attack ships. Since the closure of the Strait of Hormuz, Saudi Arabia has pivoted to the Red Sea to export most of its oil, but over the past two months, escalating tensions with the Houthis have disrupted that route. Vitol Group said that global oil markets are continuing to tighten, with the loss of about 2 million bpd from crude exports in the Middle East, and a further 2 million bpd from Russia as a result of Ukraine's drone attacks.
Data compiled by Bloomberg, Kpler and Vortexa showed that Saudi Arabia's Aug crude exports dropped to about 3 million bpd, the lowest amount in 9 years. Crude prices also have support on concerns that Israel could be dragged back into the US-Iran conflict. Israeli Defense Minister Katz recently said that an Iranian attack on Israel would free Israel from any existing restrictions in a response against the regime in Iran.
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