Hope Fades, Traders Brace for Extended Oil, LNG Squeeze
World's Largest Electric Plane Flies for 27 Minutes on $5 of Power What I Cover Irina Slav has been writing about global energy markets since 2007, covering the oil and gas industry, energy security, commodities, and the… For most of the past six months, traders active on the commodity futures markets have been mostly optimistic.
They have taken every statement by President Donald Trump about peace talks or victory over Iran at face value, betting on a speedy end of the war.
Now, it has started to dawn on many that this is not happening.
The physical squeeze is catching up with the market.
Earlier this week, the Wall Street Journalreportedthat a diesel shortage that has been brewing since spring is now growing increasingly severe and about to become even more severe as demand rises in autumn and winter.
In other fuels, the squeeze has not been as pronounced, but it is there, simply because both the Middle East and Russia were significant refined fuel exporters until war changed things.
It is not only refined fuels that are in increasingly short supply, however.
Crude oil supply is getting squeezed as well, and it seems that the U.S.
president’s powers of persuasion are running out of effectiveness, as Reuters’ Ron Boussoreportedthis week that traders are starting to price in an extended crisis in the Middle East.
Oil flows via the Strait of Hormuz have averaged some 2 million barrels daily, Bousso wrote, quoting data from Kpler.
This is down from a July average of 4.8 million barrels daily.
That, in turn, was down from average pre-war levels of 18 million barrels daily.
| Product | Price | Change |
|---|---|---|
| Brent Crude | $102.14/bbl | +0.34% |
| WTI Crude | $96.90/bbl | +0.21% |
| EN590 Diesel | $846/MT | +0.18% |
| Jet Fuel A-1 | $1090/MT | +0.55% |
| Mazut M100 | $450/MT | -0.15% |
| Bitumen 60/70 | $470/MT | +0.08% |
| Sulphur Gran 99.5% | $470/MT | -0.44% |
| Urea 46% Gran | $650/MT | +1.12% |
| NPK 16-16-16 | $460/MT | -0.28% |
| Nat Gas TTF | $15.42/MMBtu | +0.92% |
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