Essentially, the price of oil was always the US Monday after opening above the US Sunday following the Iranian military strike by the Trump administration.
Even the initial rise in the price was slightly shimmered compared to the more apocalyptic predictions heard before the attack.
However, from the perspective of the traction industry, the continuing strength of diesel compared to raw and gasoline that could get the most attention.
At about 7:05 PM EDT, about an hour after trading started on various exchanges, World Raw Benchmark Brent was up $ 1.88/barrel to $ 78.89/b, earnings of 2.44%. The U.S. benchmark raw grade, West Texas Intermediate, was up 2.52% to $ 75.70/b, earnings of $ 1.86/b. RBB gasoline, which is a semi-finished gasoline product that serves as the trading platform for finished gasoline, up 2.19% to $ 2.3806/gallon, an increase of 5.11 CTS/g. (Basically, RBB is gasoline without the extra ethanol).
But a very low sulfur diesel (ULSD) showed the biggest increase on Sunday night. 3.67% rose to $ 2.6352/g, an increase of 9.34 CTS/G.
In a remarkable inversion, by 9:30 am, oil prices were always down from Friday's settlement on the CME goods exchange.
Just before 9:30, ULSD was down about 25 base points, or .09%. WTI was up .08% and Brent was up just less than 0.2%.
Later news that two oil tankers that were initially made a u -turn to avoid going through the strait and then reversed that decision and went through anyway helped to calm markets.
In an interview on Bloomberg television and reported by Bloomberg, Bob McNally, founder of Rapidan Energy Advisers LLC and Washington Energy official, said earlier gains in the market have already moved the price to a level that reflected a potential turmoil.
“We are up $ 10 a barrel since the war began, now a little more, so I think there is an appropriate amount of risk in the market,” he said. “Traders are holding their breath, waiting to see if Israel or Iran is expanding this conflict beyond military and political targets in the traded energy.” So far, no one has removed that trigger, and if they don't, I can see the price reversing. “
If ULSD settled at that level on Monday afternoon in the US, this would be the highest price since a settlement of $ 2.6513/g on April 16, 2024.
The most bullish scenario for the oil market in the weeks leading up to the US attack on Iran's nuclear facilities and now a real one is the fate of the Hormuz Culture, a Gateway to the Persian Gulf and the oil exports path from numerous countries, including Saudran, Kuran.
And Reuters Report of 2023Quoting various sources, about 20% of about 103 million B/Thy world of use said through the Hormuz strait every day. Alternative export routes are underway for some of the countries, but it is unclear how much the infrastructure ramping up to 100% of capacity can replace normal export levels throughout the strait.
The Hormuz Strait is not international waters. Part of it is Iranian territorial waters; The other proportion is Oman's territorial waters.
Iran's parliament voted over the weekend to close the Hormuz strait, although several news reports indicated that the decision whether to implement such a radical step would be up to the country's senior leadership.
Secretary of State Marco Rubio, in an interview with Fox News Sunday, called on China to discourage Iran from following that policy. China is easily the largest customer for Iranian raw, for which the supply line comes out of Iran through the strait and on to China.
“I urge the Chinese Government in Beijing to call for that, because they rely heavily on the Hormuz strait for their oil,” said Rubio, according to several reports of his interview.
It was noted by other analysts that closing the Hormuz strait would have an external impact on Iranian exports, cutting off its most important revenue source.
Meanwhile, the high spread between raw and diesel is a relatively new phenomenon.
On a straight comparison from ULSD front month to Brent Month Front, that spread Sunday night, using the 7:05 pm prices, translated into around 75 CTS/gallon. This is the widest spread since February 2024. A month ago it was about 56 CTS/G.
In its monthly market report for middle distillery including diesel, published just before the real attack, oil market analytics research company identified energy aspects of diesel strength aspects of the continued strength of diesel compared to raw.
“We are seeing increasing risks to mid -supply distillery due to increasing Israeli conflict -iran after last Friday attacks,” said EA.
As far as two Middle East fighter, the EA report said all Israeli purists were “inactive” after Iranian attacks. The country has a relatively small refinement, but is a net exporter of diesel, EA says. That means it probably needs to turn to imports to replace the lost capacity.
As far as Iran, EA says, it produces about 700,000 b/do diesel. He is also a net exporter of diesel, “but it may need to be imported in case of any supply disturbance,” he said.
An EA report also included a chart showing a relatively tight level of diesel inventories in Europe. (The figures are in millions of barrels).
The US inventories have also been well below the five and 10 year average for the second week in June, but with diesel demand also, the size of the “cover days”-so much of the stocks measured as how long on their own they could cover their use-have been climbing in recent weeks.
