U.S. crude inventories posted an unexpected build for the week ended September 25, even as Gulf oil exports recovered from the Strait of Hormuz disruption. A tightening diesel market and a third U.S. carrier group headed to the Middle East kept oil volatile, pulling Brent back below $100 after a sharp Thursday rally.
U.S. commercial crude oil inventories, excluding the Strategic Petroleum Reserve, rose 0.9 million barrels to 427.3 million barrels in the week ended September 25, the Energy Information Administration reported. Macquarie strategists had instead forecast a 2.2 million barrel draw for the same week. Gulf crude flows drove the surprise: Saudi Arabia restarted its East-West Pipeline and resumed tanker loadings at Yanbu, and Goldman Sachs estimated Gulf oil exports recovered to 23.3 million barrels per day, near the 2025 average.
Crude eases, but the recovery is fragile
According to Zaye Capital Markets CIO Naeem Aslam, in a note cited by Rigzone: "this is not yet a normal supply environment". He pointed out that Middle East flows remain vulnerable and tanker risk persists around the Strait of Hormuz even as Saudi alternative routes ease some scarcity. JPMorgan's longer 10-day measure of Gulf exports still ran near 20.5 million barrels per day, or 89% of normal, underscoring that one strong loading week hasn't restored normal flows.
Diesel shortage keeps a floor under prices
Crude is not the market's constraint. Distillate inventories fell 2.3 million barrels to 105.2 million barrels, and gasoline stocks dropped 1.7 million barrels to 204.4 million barrels, as Russia restricted diesel exports and China suspended oil-product exports beyond Hong Kong and Macau. In response, the EU is weighing a release of 50 million barrels of diesel from strategic reserves, with another 50 million barrels potentially coming from other International Energy Agency members.
Brent slips back below $100
November WTI futures traded between $88.58 and $96.54 this week, trading near $93.00 late Thursday. The Wall Street Journal reported that the United States is sending a third carrier strike group to the Middle East, with Marine Corps ships and up to 10,000 additional troops expected to follow, adding an escalation premium to that move. Brent then fell below $100 on Friday, reversing much of Thursday's 5.5% rally, with near-term support now at $95.11.
OPEC+ is expected to leave November production targets unchanged at its meeting Sunday, removing one source of potential supply surprise and leaving the diesel shortfall as the market's main driver.
Sources: Rigzone, Oilprice.com, ActionForex
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