Recap: The oil market traded lower on Thursday as traders weighed the lower demand outlooks by the IEA and OPEC and the large build in crude inventories reported on Wednesday against the lack of progress in talks over the Strait of Hormuz. The market traded sideways in overnight trading, posting a high of $83.30, before it traded lower following Wednesday’s EIA report, which showed the U.S. crude stocks built by the largest amount since January 2023 as exports declined. The crude market sold off to a low of $80.09 by mid-morning. The market was also pressured by the lower world oil demand growth forecasts released by the IEA and OPEC on Wednesday. However, it losses were limited by reports that Yemen’s Houthis had targeted a Saudi Aramco refinery with drones on Thursday, increasing concerns over supply disruptions in an already tight market. The September WTI contract settled down $2.02 at $81.25 and the October Brent contract settled down $1.91 at $87.07. The product markets ended the session lower, with the heating oil market settling down 5.34 cents at $4.2506 and the RB market settling down 2.57 cents at $3.128.
Technical Analysis: The crude market will likely retrace some of its losses ahead of the weekend as it seems the end to the Iran war remains elusive following and the U.S. and Iranian claims over the Strait of Hormuz. The head of Iran’s Basij paramilitary unit said the Strait of Hormuz is under Iran’s control and management, while U.S. Defense Secretary, Pete Hegseth, said that the U.S. military could keep a blockade on Iranian ports for as long as needed. The market will also remain well supported by the the latest report of Yemen’s Houthis targeting Saudi Aramco’s Jazan refinery. The oil market is seen finding support at $80.09, $79.43, $78.20, $77.79, $76.53, $74.57 and $74.24. Meanwhile, resistance is seen at $83.30, $84.35, $84.61, $86.87 to $87.68, $92.83 and $93.50.
Fundamental News: LSEG data showed that diesel cargoes are costing more than jet fuel in Europe for the first time in more than a year, as the continent replaces lower Middle East air fuel shipments with other sources of supply, but struggles to secure more diesel for industry and agriculture. Europe has been able to pull in jet cargoes from the U.S. and other countries like Nigeria as prices increased after the start of the Iran war. Global diesel supply tightened even further when Russia banned exports amid Ukrainian attacks on its refineries. Analysts at Goldman Sachs said “We see a higher risk of persistent scarcity pricing in diesel than in crude heading into winter.” According to Kpler, Europe increased imports of jet fuel to 750,000 bpd in June, the highest level since October 2025, and a similar rate in July from 612,000 bpd in January. By contrast, European diesel imports have fallen to 1.56 million bpd in July from 1.97 million bpd in January. LSEG data showed that the price of diesel overtook that of jet fuel this week.
Bloomberg reported that gasoline prices and diesel prices are lower than peak levels reached earlier this year, gasoline prices are still over $4/gallon and diesel prices at about $5.40/gallon. Both are at record highs for this time of year. Last year, the price of gasoline and diesel were $3.16/gallon and $3.72/gallon, respectively. The US Department of Energy raised its fuel price forecasts on Tuesday, forecasting gas at an average of $4/gallon in the third quarter and $3.72/gallon in the fourth quarter, still well above seasonal norms. Diesel is seen falling just shy of $5 by year’s end. Bloomberg stated that the price of gasoline and diesel will remain elevated until a lasting deal is struck with Iran.
Yemen’s Houthis said they attacked an Aramco refinery in Saudi Arabia’s Jazan with two drones on Thursday. A Houthi military source said the attack was in response to what the group described as Saudi violations of Yemeni airspace and sovereignty in Saada and Hajjah provinces.
Early Market Call – as of 9:45 AM EDT
WTI – Sep $80.92, down 29 cents
RBOB – Sep $3.0983, down 1.51 cents HO – Sep $4.1912, down 4.31 cents
