The WTI crude oil market experienced significant fluctuations last week due to news about the potential reopening of the Strait of Hormuz and existing transportation risks. On Tuesday, the WTI crude oil contract reached $88.67 and then increased to $96.78 on Thursday. These price changes reflect a lack of consensus and unstable transportation conditions in the market.
Oil Price Analysis and Its Impacts
As of 2200 GMT on Thursday, the price of WTI crude oil reached $94.76, indicating a decrease of $0.71 or 0.74% compared to the previous week. However, prices remain above the week's low of $88.67. These fluctuations indicate traders' reactions to news regarding increased Saudi and Iraqi supply.
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Saudi Aramco has contributed to improving market conditions by increasing its exports through the Strait of Hormuz. According to reports, about 14 million barrels of oil have been loaded from seven VLCC ships in the Persian Gulf this week. This increase in Saudi oil flow has led the market towards improvement, although alternative routes still face challenges.
Diesel Shortage and Its Effects on the Market
While the crude oil market is moving towards recovery, the diesel market is facing serious challenges due to supply shortages. Diesel prices in Europe have reached a record close to $95 per barrel, and diesel prices in the United States remain above $6 per gallon. This shortage is due to disruptions in processing and product flow, not merely a lack of crude oil.
Recent reports indicate that U.S. commercial crude oil inventories increased by 3 million barrels to 426.4 million barrels in the week ending September 18. In contrast, diesel inventories decreased by 428,000 barrels to 107.4 million barrels. This discrepancy in inventories highlights the urgent need for improved diesel and refined product supply.
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