Key Highlights
- Brent crude declined 0.8% to $97.24 per barrel while WTI dropped 1% to $89.50 on Thursday’s session.
- Regional crude shipments from the Middle East reached 16.328 million barrels daily in September, marking the peak since hostilities started in February.
- Saudi Arabia resumed operations at Yanbu terminal following repairs to its East-West pipeline infrastructure.
- Major financial institutions like Goldman Sachs, J.P. Morgan and Morgan Stanley increased their crude price projections through year-end.
- Diesel prices in the United States surged to an unprecedented $6.53 per gallon amid discussions of potential export restrictions.
Oil prices experienced a pullback on Thursday following the previous session’s gains. Market participants are monitoring indicators suggesting Middle Eastern crude availability is stabilizing, though questions persist about the sustainability of this trend.
December Brent crude futures decreased 0.8% to settle at $97.24 per barrel during trading at 02:41 ET. Meanwhile, U.S. West Texas Intermediate crude retreated 1% to $89.50 per barrel.
Wednesday marked the expiration of the front-month Brent futures contract, which closed at $103.50 during the previous trading day.
September proved strong for Brent with approximately 14% gains, representing its best monthly performance since July. WTI climbed roughly 5% during the equivalent timeframe.
Regional Supply Shows Recovery
Fresh data indicates Gulf region shipments are bouncing back. September saw Middle Eastern crude exports hit 16.328 million barrels daily, representing the strongest figure since February’s outbreak of regional tensions, according to analytics provider Kpler.
The kingdom of Saudi Arabia has restarted loading operations at Yanbu, its Red Sea export facility. This development followed the successful restoration of the East-West pipeline system that experienced earlier damage.
Despite these improvements, regional export volumes continue trailing pre-conflict benchmarks. Kpler’s analysis reveals September shipments remained approximately 3.2 million barrels per day beneath February’s baseline. This gap leaves markets vulnerable to additional supply shocks.
Diplomatic developments continue unfolding simultaneously. Iranian officials announced Wednesday they had received Washington’s response to their most recent ceasefire framework. This exchange occurred after President Donald Trump dismissed an earlier proposal connected to Strait of Hormuz access restoration.
Financial Institutions Lift Outlook
Research compiled by The Wall Street Journal indicates leading banks have elevated their crude price expectations. Goldman Sachs, J.P. Morgan and Morgan Stanley collectively project Brent crude will average $90.22 per barrel during Q4. WTI forecasts stand at $85.47 per barrel average.
These projections represent substantial increases from previous estimates of $78.92 and $74.62 per barrel respectively. The upward revision acknowledges persistent concerns regarding supply vulnerabilities linked to Iranian tensions.
Annual average projections place Brent at $88.13 per barrel with WTI at $82.98 per barrel. Analysts anticipate moderation during early 2024, forecasting Brent declining to $83.44 and WTI falling to $79.88 during the first quarter.
Chinese consumption patterns continue generating uncertainty. The nation has drawn upon inventories accumulated prior to conflict escalation, reducing immediate purchasing requirements. Goldman Sachs reports Chinese crude imports increased 6% in September versus August levels.
Domestically, U.S. refined product markets face tightening conditions. Gasoline inventories decreased by 1.7 million barrels during the past week. Distillate reserves, encompassing diesel and heating oil, fell 2.3 million barrels.
Diesel pricing in the United States achieved a record $6.53 per gallon last week. Stockpiles remain at historically depressed levels. President Trump confirmed Wednesday that administration officials continue evaluating a potential prohibition on U.S. diesel exports. Earlier White House statements had refuted reports suggesting a 90-day comprehensive restriction.
Russian authorities are anticipated to prolong their diesel export limitations for an additional month. This measure compounds existing strain on global refined product availability as the year’s final quarter approaches.
