Oil prices rose after Trump dismissed claims that he was willing to ease sanctions
Oil shipments through the Strait of Hormuz are at their highest level since February. After falling in the previous session due to a recovery in crude oil supplies from the Middle East, oil prices rallied on Wednesday as Trump dismissed claims that he was willing to ease sanctions on Iran.
The Brent crude contract for November delivery, set to expire on Wednesday, rose 84 cents, or 0.82%, to $103.43 per barrel as of 09:50 Turkish time (06:50 GMT). The more actively traded December contract climbed 19 cents to $87.59. Meanwhile, WTI gained 25 cents, or 0.28%, reaching $89.63.
Both Brent and WTI are trading at their highest levels since May. Brent crude is on track for a 14% gain in September, while concerns regarding potential US diesel restrictions are weighing on WTI prices.
Brent crude is poised to record its largest monthly gain since July, rising approximately 14%, while WTI is on track for a 4% increase, having surpassed the $106 mark for the first time since May.
As investors closely monitor potential US plans to restrict diesel exports, the price spread between the two benchmark crude grades has widened to its greatest extent in four months. This is because the restriction in question could create a supply glut in the US market and lead refineries to process less crude oil.
Ahead of the November midterm elections, Trump is considering allowing the sale of red-dyed diesel, rather than imposing an export ban, to provide consumers with some relief regarding prices.
Improving supply conditions could limit the rise in prices; however, renewed supply disruptions or an escalation of tensions could trigger another price surge.
On Tuesday, Saudi Arabia resumed oil tanker loadings at the Red Sea port of Yanbu after restarting operations on the East-West Pipeline.
Crude oil exports from Middle Eastern producers rebounded in September to reach 16.328 million barrels per day, the highest level seen since February 28, when the Iran-Iraq War began.
With the restoration of flow through the Saudi East-West pipeline, regional exports are now just 11% below pre-war levels, a highly satisfactory recovery for a region where conflict is still ongoing.
According to market sources citing American Petroleum Institute (API) data, US crude oil and gasoline inventories rose last week, while distillate stocks declined.
Official inventory data from the US Energy Information Administration (EIA) is scheduled for release at 14:30 GMT. Analysts anticipate a decline in crude oil and product inventories.
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