Crude prices log biggest weekly gain since July as U.S.-Iran tensions escalate

West Texas Intermediate crude held near $91 per barrel and Brent near $96 as Labor Day weekend closed out the strongest weekly gain for oil since July, roughly 8 to 9 percent. The move was underpinned by a Saturday military exchange in the Gulf of Oman: Iran’s IRGC fired ballistic missiles toward U.S. Navy vessels, and CENTCOM responded by disabling three Iranian oil tankers. Hormuz-related disruptions have kept a floor under crude prices throughout the summer.

The tight supply picture extended to refined products. The national average gasoline price reached $4.03 per gallon on Labor Day, the highest holiday average on record, according to GasBuddy analyst Patrick De Haan. Diesel hit a new record as well, with Gulf Oil chief energy adviser Tom Kloza noting a better-than-even chance retail diesel would surpass the all-time high of roughly $5.82 per gallon set in June 2022. Attacks on Russian refining facilities added further pressure on distillate inventories across global markets.

U.S. refinery utilization stood at 98 percent, the highest since 2018, leaving little room to absorb additional supply disruptions, Wood Mackenzie research analyst Kuan Dosmuratov told CNBC. Gasoline inventories fell 1.2 million barrels last week to 205.7 million barrels, well below the five-year August average of 217.6 million barrels. Refined product exports rose more than 10 percent year over year, according to the U.S. Energy Information Administration, as countries turned to American supplies amid ongoing U.S.-Iran tensions.

Source: CNBC

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