Oil prices remained around the $100 mark on Monday despite a major supply boost planned by G7 countries. Brent crude futures were up 5 cents at $102.30 a barrel at 0900 GMT, while US West Texas Intermediate (WTI) was at $90.62 a barrel, down 49 cents, or 0.5%. Both benchmarks had fallen more than 1% earlier in the session.
Middle Eastern crude exports actually rose above pre-war levels on four of the seven days in the final week of September, according to shipping data reported by Reuters. The emergency release should add more oil to global markets, but traders are still worried about how much supply could be disrupted. Oil prices had already weakened last week before Monday’s volatile trading. But the supply picture is still tight, especially for refined fuels. One reason for the jump in refined fuel prices is China’s decision to suspend some product exports. Middle East tensions are also keeping a risk premium in oil prices. Saudi Aramco is warning that the global oil market may remain stretched for a long time.
The G7 has promised to release 100 million barrels of diesel and crude oil from emergency reserves. Brent gave up most of its gains from the previous week, while WTI fell 1.6%, after the G7 announced the emergency reserve release. ICE gasoil futures, an important European benchmark for diesel and other middle-distillate products, jumped more than 4% to $1,409 a metric ton on Monday.
Because countries have been using emergency reserves to deal with supply problems, meaning those stockpiles will eventually need to be rebuilt, this is important.
Tamas Varga, an associate analyst at PVM Oil, said the rise in heating oil and gasoil prices could be linked to the suspension of Chinese product exports , which is creating a tighter supply situation for refined products in the Far East. Varga said a ceasefire in the region remains difficult to achieve and that renewed fighting involving Saudi Arabia and Iran-backed Houthis could lead to more attacks on energy infrastructure and ships. Nasser also said rebuilding global oil stockpiles could take as long as two years.
The G7 countries agreed to the release on Friday and also promised not to introduce energy export restrictions after pressure from US President Donald Trump, Reuters reported. Saudi Aramco CEO Amin Nasser said at the Energy Intelligence conference in London on Monday that supplies of crude oil and refined fuels were likely to remain tight.
Fighting around another key shipping route is also continuing.
Yemeni government forces attacked Houthi positions in the Dhubab district overlooking the strategic Bab el-Mandeb Strait, according to two military sources cited by Reuters.
