Recap: The oil market retraced some of its losses on Thursday as the market considered President Donald Trump’s next steps regarding the Iran war after the Republican Party suffered losses in the mid-term elections this week. There are concerns that with the midterm elections over, the Trump administration could potentially escalate the conflict with Iran, despite President Trump stating this week that he had no immediate plans to strike Iran. The crude market continued to trend lower in overnight trading and posted a low of $86.65. However, the market bounced off its low and retraced some of Wednesday’s sharp losses. It traded to a high of $90.99 by mid-day and settled in a sideways trading range during the remainder of the session. The December WTI contract ended the session up $2.40 at $90.52 and posted a new high of $91.05 in the post settlement period. The January Brent contract settled up $3.67 at $98.29. The product markets also retraced some of their sharp losses and settled higher, with the heating oil market settling up 14.64 cents at $4.3519 and the RB market settling up 3.48 cents at $2.7634.
Technical Analysis: The crude market will likely continue to trend sideways amid the uncertainty over future course of the Iran war. The market will remain supported by continuing tensions in the Middle East and the attacks on tanker in the Gulf. The oil market is seen finding resistance at $91.05, $93.66, $95.82, $97.15, $97.98 and $98.82. Meanwhile, support is seen at $86.65, $86.00, $85.28, $83.15 and $82.08.
Fundamental News: Iran’s Foreign Ministry said Iran’s Foreign Minister Abbas Araqchi discussed on Thursday in separate phone calls with his Saudi and Qatari counterparts the “latest progress” in diplomatic efforts aimed at establishing stability in the region. Later, Iran’s Foreign Minister discussed regional developments with the UAE’s Foreign Minister, Sheikh Abdullah bin Zayed.
Saudi Arabia’s civil defense issued an alert on Thursday warning of potential danger in Yanbu Governorate, the country’s Red Sea oil export hub, as Yemen’s Iran-aligned Houthis continue attacks on the kingdom. The Saudi-led coalition fighting the Houthis in Yemen said it destroyed a missile launched by the group towards Islam’s holy city of Medina. The kingdom’s civil defense also issued emergency alerts for the southeastern area of Sharurah that borders Yemen. The Houthis had yet to claim any attack on the kingdom on Thursday.
The Revolutionary Guards Navy said a tanker caught fire after hitting a naval mine east of the Strait of Hormuz early on Thursday, adding that the vessel had been operating in an unsafe area. The tanker had switched off its identification and navigation systems, as had other tankers that the force said had hit naval mines and caught fire in recent days. The Guards warned shipowners that the Strait of Hormuz was “unsafe and closed” to vessels attempting to transit without coordination.
The Kremlin said diesel shipped by Russia will make its way to buyers, after reports that two tankers initially destined for the United States had changed course.
Bloomberg reported that a new round of export quotas announced last week brought China’s total fuel-export quotas for the year to about 42 million tons. It is the highest level since 2021, and comes despite a recent drawdown of diesel stockpiles. Refiners are currently drawing up new export plans for gasoline, jet fuel and diesel, with monthly shipments subject to approval from Beijing. Bloomberg noted that whatever it decides, Beijing’s approach to diesel exports for the remainder of the year will be felt beyond its borders.
Early Market Call – as of 9:20 AM EDT
WTI – Dec $90.61, up 8 cents
RBOB – Dec $2.7564, down 70 points
HO – Dec $4.3383, down 1.36 cents
