Oil Prices Rebound Amid Escalating Middle East Tensions
Oil prices experienced a sharp reversal in late-day trade, dropping $0.76, or 0.69%, to settle at $108.79 per barrel after touching a session peak of $111.99 per barrel. The decline came as traders unwound long positions ahead of WTI contract expiration and expectations grew that temporary U.S. sanctions waivers on Russian diesel shipments will gradually augment global middle distillate supplies.
Market Volatility Amid Escalating Regional Tensions
Downstream markets were split, with NYMEX ULSD for November delivery edging up $0.0049, or 0.10%, to finish at $4.9250 per gallon, pulling back after topping $5.0182 per gallon earlier in the day. Front-month RBOB gasoline retreated $0.0742, or 2.32%, to close at $3.1172 per gallon.
Regional Tensions Escalate
The late sell-off represented a sharp reversal from early-morning trade, when futures surged on mounting supply threats in the Middle East. The United Kingdom Maritime Trade Operations Center reported 30 attacks in and surrounding the Strait of Hormuz so far this month, while commodity intelligence firm Kpler confirmed 18 verifiable ship strikes over the past two weeks alone.
Tehran-aligned forces also expanded targeted operations beyond the Persian Gulf into the Gulf of Oman — threatening a key offshore ship-to-ship transfer route utilized by Saudi Arabia to bypass the strait. The escalation prompted Saudi authorities to postpone a major economic forum citing security concerns.
Market Participants Look Ahead
Despite the heightened physical risks in the Persian Gulf, market participants now turn their attention to weekly inventory reports for directional cues. The American Petroleum Institute releases its weekly crude and product stocks estimate late Tuesday afternoon, followed by official data from the U.S. Energy Information Administration on Wednesday, Oct. 21, morning.
Original Article: Oil Slides in Volatile Sanctions-Driven Trade — Dtnpf