Recap: The oil market continued on its upward trend on Tuesday amid renewed escalation in tensions between the U.S. and Iran. The market was well supported following strikes in the Persian Gulf, including attacks on two tankers carrying Saudi crude oil in the Strait of Hormuz. The crude market posted a low of $86.13 on the opening and never looked back as it continued to trade higher after U.S. President Donald Trump on Monday threatened further strikes against Iran. The oil market extended its gains to $4.79 as it rallied to a high of $90.55 ahead of the close. The market was supported further amid the news that the U.S. had struck Islamic Revolutionary Guard Corps targets in Iran on Tuesday afternoon. Also, President Trump dismissed the value of any deal with Iran. The October WTI contract settled up $4.46 at $90.22 and continued to rally in the post settlement period, posting a high of $90.97. The November Brent contract settled up $4.16 at $94.65. The product markets ended the session higher, with the heating oil market settling up 26.67 cents at $4.6773 and the RB market settling up 5.81 cents at $3.1351.
Technical Analysis: The crude market will remain well supported by the continuing concerns over oil flows through the Strait of Hormuz following the attacks on the two Saudi oil tankers. The market will remain supported by further strikes against Iran as the U.S. is not willing to return to its commitments under the interim peace deal signed in June. The oil market is seen finding resistance at $90.97, $91.09 and $91.27. Meanwhile, support is seen at $86.13, $84.11 to $83.78, $82.25, $80.65 and $79.62.
Fundamental News: U.S. Treasury Secretary, Scott Bessent, said the United States is likely to announce sanctions on a bank this week as part of its economic campaign against Iran.
Preliminary ship-tracking data showed that the number of vessels sailing through the Strait of Hormuz was little changed on Monday compared with the weekend, remaining around five, below the 10-day average of around 14. Kpler data showed that four of the vessels entered the strait and one exited. According to Iranian media reports, a Saudi oil tanker was stopped on Tuesday while transiting through the southern corridor of the Strait of Hormuz. Meanwhile, at the other chokepoint, the Bab-el Mandeb strait, the number of vessels transiting was at a three-day high of 27, with 14 entering and 13 exiting. Five of the 27 vessel transits were either Aframax- or Suezmax-sized crude tankers. None of the vessels that entered or exited were very large crude carriers or liquefied natural gas tankers.
Two U.S. officials said U.S. oil company North American Blue Energy Partners will take over some oilfields previously controlled by several Chinese companies and a Russian firm. The takeover will be part of a sweeping oil production agreement that President Donald Trump announced with Venezuela. The projects were among 14 contracts newly granted to U.S.-backed North American Blue Energy Partners. NABEP is expected to control a total of 17 projects in Venezuela that it plans to develop and ultimately use to supply oil to the U.S. Fourteen of those projects will be newly granted by the Venezuelan government. Five of the 14 fields have been operated by Chinese companies under a model promoted by then-President Nicolas Maduro, while one was previously operated by a Russian company.
Motiva, Exxon Mobil and TotalEnergies are maintaining planned production at their East Texas refineries as Tropical Storm Edouard nears landfall later on Tuesday close to those three U.S. Gulf Coast plants. Both the Exxon Beaumont refinery and the TotalEnergies Port Arthur refinery told contractors to stay home on Tuesday or sent them home Tuesday morning while keeping the full staff of employees on hand.
Early Market Call – as of 8:30 AM EDT
WTI – Oct $89.59, down 63 cents
RBOB – Oct $3.1567, up 2.16 cents
HO – Oct $4.6062, down 7.09 cents
