The barrel on the screen and the barrel in the line
Brent rose 1.15 dollars, or 1.16 per cent, on Wednesday to 100.40 dollars a barrel. West Texas Intermediate gained 0.35 dollars, or 0.42 per cent, to 90.90 dollars. In the previous session Brent had touched 97.36 dollars, its lowest since 8 September. The bounce followed a restarted pipeline and a record diesel premium, and it leaves the delivered volume still uncounted.[1]
Saudi Arabia resumed operations on Tuesday on the East-West pipeline to the Red Sea. Drone attacks blamed on Iraqi militia had shut the line on 11 September and halted crude loadings at Yanbu. The kingdom offered Asian refiners extra barrels for lifting outside the Strait of Hormuz. Iraq's oil minister said exports are above 3 million barrels a day and that the Turkey route is aimed above 600,000 barrels a day. The restarted operation still leaves the pre-attack flow unmeasured.[1]
The tight point is the product, not the crude screen. Europe's low-sulphur gasoil premium to Brent hit a record of about 95 dollars. The premium rose after Donald Trump backed the idea of a diesel export ban. Diesel is the product Europe has been drawing from the United States since the war cut Middle East supply. A record premium shows scarcity in refinery output, not in the barrel quote.[1]
The stock build and the premium to watch
Industry data showed US crude inventories rose by 1.8 million barrels in the week to 18 September. Analysts polled by Reuters had expected a decline. A build is extra crude in tanks for that week, not a lost barrel. The official weekly count has not yet replaced that picture.[1]
If the premium stays near 95 dollars and Yanbu loadings do not come back in volume, product tightness outlasts the crude bounce into mid-October. The sign to watch is Europe's low-sulphur gasoil premium to Brent and the loadings reported from Yanbu.[1]
That July column read a falling oil futures price together with a Red Sea insurance wall. Since then the East-West line that had been shut has restarted. The scarcity now sits in the diesel premium of about 95 dollars.[1], [2]