Oil prices fall after surge over supply risks
Global oil prices fell on September 11 but remained on track for a weekly gain of more than 8% amid concerns about prolonged supply disruptions following attacks on Middle Eastern shipping routes. According to Channel NewsAsia, the average price of diesel fuel in the United States exceeded $6 per gallon for the first time.
As of 11:32 GMT, Brent futures fell by $3.45, or 3.21%, to $104.18 per barrel. U.S. West Texas Intermediate crude lost $2.96, or 2.89%, and traded at $99.52 per barrel. Earlier in the session, both benchmark grades reached their highest levels since mid-May.
Talks on the Strait of Hormuz
Prices turned lower after the Financial Times reported that foreign ministers in the Middle East were trying to agree with Iran on a temporary arrangement for shipping through the Strait of Hormuz. The previous day, Brent and WTI rose by more than 6% after attacks on maritime routes in the region intensified.
UBS analyst Giovanni Staunovo said reports of possible new talks were exerting moderate pressure on prices. At the same time, in his assessment, risks of further oil price increases and high price volatility remain in the short term.
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According to the International Energy Agency, crude oil supplies from Saudi Arabia fell by 2.3 million barrels per day in August compared with the previous month, to 6 million barrels per day. This is the lowest level in more than three decades. The agency linked the decline to attacks on the kingdom's energy facilities. Satellite images also showed smoke near Saudi Arabia's East-West pipeline, which allows oil exports to be redirected around the Strait of Hormuz.
Record diesel price in the United States
Four Yemeni government sources told Reuters that Iran-backed Houthis had reached Perim Island in the Bab el-Mandeb Strait. Iran said it attacked 10 vessels near the Strait of Hormuz on September 9 after a U.S. strike on five Iranian oil tankers. The Islamic Revolutionary Guard Corps said it intended to intensify its response in the event of further attacks.
Preliminary vessel-tracking data showed that seven vessels passed through the Strait of Hormuz on September 10, compared with 11 a day earlier. Before the Iran war began in late February, the strait handled the passage of about 125 cargo vessels a day and the transport of one-fifth of global daily supplies of oil and liquefied natural gas.
Disruptions to oil supplies, as well as Ukraine's strikes on oil refineries of the Russian Federation, an aggressor state, pushed the average U.S. diesel fuel price above $6 per gallon for the first time in history, GasBuddy reported. Commerzbank raised its year-end Brent price forecast from $75 to $85 per barrel, its diesel fuel forecast from $950 to $1,200 per tonne, and its jet fuel forecast from $980 to $1,230 per tonne.
