Recap: The crude market traded higher on Thursday amid few signs that diplomatic efforts to end the war with Iran were having an effect. The market was further supported by news that China was suspending its oil product exports. Chinese refiners suspended its oil exports to regions beyond Hong Kong and Macau until further notice, a move that will further tighten fuel markets already coping with global supply shortages. Diesel and other refined products supply remain tight following damage to refinery infrastructure in the Gulf and Russia. The oil market posted a low of $88.79 in overnight trading before it rallied higher on the Chinese export ban. The market was well supported and traded to a high of $93.11 ahead of the close. The November WTI contract settled up $2.45 at $92.87 and the November Brent contract settled up $4.28 at $102.31. The product markets ended the session in mixed territory, with the heating oil market settling down 4.61 cents at $4.6420 and the RB market settling up 14.21 cents at $3.4026.
Technical Analysis: The oil market will remain in its recent trading range as the market remains supported by lack of breakthrough in diplomacy to end the war with Iran. While Iran has been pushing for a diplomatic solution, it is also preparing for a broader and more forceful response if the U.S. were to resume its large scale military attacks. The market will also remain well supported by the possibility of further supply shortages. The crude market is seen finding support at $88.79, $88.58, $88.18, $86.13, $85.92 and $84.24. Meanwhile, resistance is seen at $93.68, $94.74, $95.52, $96.54, $96.78, $97.22, $97.67, $98.01, $99.81 followed by $100.61 and $101.69.
Fundamental News: U.S. President Donald Trump said that he has conversations about banning diesel exports “every day”. Speaking from the Oval Office, President Trump said an export ban would “have a negative impact on gasoline” prices, but could lower diesel costs. He said Russia’s war in Ukraine, with strikes from either side impacting energy production and exports, is the main cause of rising diesel prices. According to AAA data, gasoline prices have increased more than 40% over the past year and diesel increased to a record of $6.53/gallon a week ago. The price spike is largely driven by a combination of a reduction in supply due to the Iran war and interruptions to refining, in part because of Ukraine’s attacks on Russian energy facilities.
According to sources, the Trump administration has requested that Germany and France draw down emergency diesel inventories to help to ease global fuel prices or face a potential U.S. diesel export ban. The warning marks an escalation of pressure on Europe as US President Donald Trump considers a potential diesel export ban to bring down U.S. fuel prices ahead of November’s midterm elections. A source said that the U.S. has asked the EU to release 120 million barrels of diesel in the next six months.
U.S. Energy Secretary Chris Wright said that he was “highly confident” Europe could help ease soaring global fuel prices by drawing down emergency diesel inventories to help ease increasing global fuel prices.
European Union trade chief, Maros Sefcovic, said that he discussed tight diesel supplies and price spikes with US Trade Representative Jamieson Greer and expressed Europe’s desire for a coordinated approach to lowering prices.
Bloomberg stated that the oil market is growing more vulnerable as the Strait of Hormuz remains disrupted, with Brent averaging about $102/barrel in September. Under BloombergNEF’s base case scenario of a November Hormuz reopening, Brent is forecast to average $92/barrel in 2026 and $75/barrel in 2027. A closure lasting through the winter until April 2027 could push Brent to between $147/barrel and $150/barrel.
Early Market Call – as of 8:40 AM EDT
WTI – Nov $89.28, down $3.60
RBOB – Nov $3.2738, down 12.88 cents
HO – Nov $4.4865, down 15.55 cents
