August WTI crude oil (CLQ26) on Monday closed up +0.74 (+0.90%), and August RBOB gasoline (RBQ26) closed down -0.0037 (-0.11%).
Crude oil and gasoline prices settled mixed on Monday, with crude oil rallying to a 5-week high amid the escalation of hostilities between the US and Iran, which is keeping the Strait of Hormuz closed and tightening global oil supplies.
Crude Prices Erase Early Gains on Possible US-Iran Truce Proposal
Nat-Gas Prices Weaken on Tropical Storm Risk
Tired of missing midday reversals? The FREE Barchart Brief newsletter keeps you in the know. Sign up now!
gave up overnight gains and turned lower after Reuters reported that mediators had proposed a 10-day ceasefire between the US and Iran. Prices initially moved higher today, with crude posting a 5-week high and gasoline posting a 2-month high after hostilities between the US and Iran escalated further over the weekend.
The US conducted a ninth straight day of airstrikes on Iran on Monday, bombing military targets and communications networks, and Iran retaliated by launching drones and missiles at US bases in Kuwait, Jordan, Bahrain, and Iraq. The New York Times reported that the US is sending more warplanes to the Middle East, including F-35 and F-16 fighter jets, a possible sign that US military operations could expand in the coming days. Also, President Trump on Monday vowed Iran "will pay" for killing three US soldiers in recent days.
Signs that the conflict in the Middle East is widening are also supporting crude oil after Houthi rebels said on Monday that they will impose a maritime blockade on Saudi Arabia in retaliation for what they say is the kingdom's siege on the Yemeni capital, a potential threat to Saudi Arabian crude exports through the Red Sea.
Crude prices erased early gains and briefly dipped on Monday amid hopes that diplomacy could end hostilities between the US and Iran. Iran said on Monday that it wouldn't abandon diplomacy and that Qatar and Pakistan had reached out to mediate an end to the conflict and proposed a 10-day cessation of strikes between the US and Iran.
Global crude oil supplies are tightening due to reduced flows through the Strait of Hormuz. The International Maritime Organization warned last Wednesday that it's too dangerous to cross the Strait of Hormuz at the moment, and visible transit through the strait has fallen sharply as Iran continues targeting tankers attempting to transit it.
Crude oil and products also have support from strength in the crude crack spread. The crack spread rose to a record high last Friday, potentially persuading refiners to boost their crude oil purchases and refine it into gasoline and distillates.
Source: Yahoo Finance Top News — This article was automatically imported from the source. Read full article at original source →
