Story
Oil Prices Steady as Middle East Supply Risks Offset US Crude Build
Summary
Crude oil prices held recent gains as traders balanced a partial recovery in Middle Eastern exports against persistent geopolitical risks and tightening refined fuel markets in the United States.
Oil prices were stable in early trading Thursday, holding onto significant monthly gains as ongoing supply risks in the Middle East provided a floor for the market, offsetting bearish U.S. inventory data.
By 20:35 ET (00:35 GMT), Brent crude futures for December delivery were trading near $98.23 per barrel, while West Texas Intermediate (WTI) crude futures were little changed at $90.49 per barrel. The gains mark a strong month for crude, with Brent rising about 14% in September, its best performance since July, according to Investing.com data.
Middle East Tensions Underpin Prices
Recent data showed a partial recovery in oil flows from the Gulf, but the market remains on edge. According to data from Kpler, Middle East crude exports reached 16.328 million barrels per day (bpd) in September, the highest since a regional conflict began in February. This was supported by Saudi Arabia resuming tanker loadings from its Yanbu port on the Red Sea.
However, these flows remain significantly constrained. Kpler's data indicated that September's export levels were still approximately 3.2 million bpd below pre-conflict volumes from February. This shortfall leaves the global oil market highly sensitive to any new disruptions. Diplomatic uncertainty also persists, with Iran confirming it had received a U.S. response to its latest ceasefire proposal, keeping geopolitical risk premiums elevated.
AdTight Fuel Markets Counter Crude Build
Support for crude prices also came from tightness in refined product markets, which overshadowed a surprise build in U.S. oil stockpiles. The Energy Information Administration (EIA) reported on Wednesday that:
- U.S. crude inventories rose by 922,000 barrels last week, contrary to analyst expectations for a 700,000-barrel draw.
- Gasoline inventories fell by 1.7 million barrels.
- Distillate stocks, which include diesel and heating oil, dropped by 2.3 million barrels.
The significant draws in fuel inventories point to robust demand and tight supply, particularly for diesel. The data comes as the White House continues to discuss a potential ban on U.S. diesel exports to combat historically low domestic inventories and record prices, which hit $6.53 a gallon last week, according to the source.
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