Oil prices rose for a second consecutive session on Tuesday 29 September, as ongoing concerns over potential supply disruptions in the Middle East linked to the US-Israeli conflict with Iran continued to outweigh indications of improving crude exports from the area.
By 08:44 GMT, Brent crude futures for November delivery had risen by $0.19, or 0.2%, to $105.47 per barrel (bbl), reported Reuters.
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The more frequently traded Brent contract for December was up by $0.11, reaching $97.94/bbl.
US West Texas Intermediate (WTI) crude was trading at $92.82/bbl, an increase of $0.22 from the previous session.
For the current month of September, Brent and WTI November contracts are poised to record gains of around 17% and 8%, respectively.
Preliminary data from Kpler showed that crude exports from key Middle Eastern producers reached 12.8 million barrels per day (mbbl/d) in September, their highest level since February, with Saudi Arabia and the United Arab Emirates contributing to the increase.
The ongoing conflict involving the US, Israel and Iran, which began in late February, continues to focus attention on the Strait of Hormuz, a vital route for global oil and gas supplies. Disruptions in this corridor have continued to impact energy markets.
Talks to resolve the conflict are continuing, according to US and Iranian officials.
Meanwhile, the effects of the conflict have spread to the liquefied natural gas (LNG) market.
QatarEnergy has extended force majeure notifications, preventing deliveries of LNG to utilities such as Italy’s Edison and clients in Bangladesh and Pakistan, reported Reuters.
Edison stated that it will not receive LNG cargoes until at least the beginning of December, in a continuation of a notification first issued in April.
Data from ICIS indicated that Qatar’s LNG exports have dropped by 96%, with only 18 LNG shipments made by the end of August, compared to 509 in the same period last year.
Separately, US officials are weighing regulatory changes that would permit broader sales of red-dyed diesel, a move that could allow some buyers to bypass federal fuel tax and help reduce domestic prices, according to people familiar with the discussions. The proposal has emerged as a leading alternative to an outright ban on diesel exports.
TS Lombard’s Alexandros Xenofontos, Davide Oneglia, Rory Green and others noted that China acted as a key buffer during the early phase of the conflict as electrification, inventories and some demand destruction cut its crude imports by sea, helping contain the price effect of lost Gulf barrels.
However, infrastructure spending is now drawing Chinese buyers back to West African, Canadian and Latin American supply, tightening physical markets more broadly, the report added. Dated Brent is again several dollars above front-month futures, with physical North Sea crude approaching $110/bbl.
