| Commoditiy | Price | Weekly Change | 50day-Ave | 100day-Ave | 200day-Ave |
|---|---|---|---|---|---|
| Brent ($/b) | 107.47 | 7.13 | 94.30 | 91.18 | 87.49 |
| US WTI ($/b) | 95.01 | -0.77 | 88.29 | 86.84 | 81.99 |
| ICE Gasoil ($/MT) | 1,469.75 | 28.25 | 1,342.62 | 1,191.91 | 1,070.83 |
| Jet CIF NWE ($/MT) | 1,521.16 | 31.84 | 1,363.24 | 1,236.70 | 1,161.20 |
Brent has traded in a wide range last week, as low as 97 \$/b at times but over 108 \$/b at others. Over the last week or so Brent has been heavily influenced by the prospect of talks between the US and Iran restarting in some way. At some times this looked more likely and Brent fell down to 97 \$/b, and at others less likely Brent up over 108 \$/b. Both leaders gave speeches at the UN General Assembly, but both sounded uncompromising. Then, at the end of last week, Iran made a proposal to reopen the Strait in 7 days, essentially by restating its requirements from the Memorandum of Understanding signed in the summer, which Trump again rejected as he has several times already. Iran has confirmed that it will not soften its red lines and so the deadlock persists.
Meanwhile in the US there has been a lot of talk about a possible US diesel export ban. US refineries produce more diesel than is needed domestically, so the US is a major exporter of diesel, particularly into Europe. It would therefore have a knock-on effect on prices in Europe, making a very difficult situation even worse. Simply the risk of such a policy being introduced led to the premium of diesel prices over Brent reaching a new high, well over 100 \$/b. The excess diesel produced in the US cannot be reduced without reducing the output from domestic refineries of other products such as petrol, which the US does not produce enough of for its own needs and needs to supplement domestic supplies by imports. Consequently, an export ban on diesel, would force the excess diesel production to go into storage, which might fill up in as little as a month. If the diesel storage in the US fills, there would be no choice but for refineries there to cut production of all products, increasing the need to import things like petrol, which would force up prices. For these and other practical reasons, the plan might need to be abandoned. Indeed, on Friday evening, Senator Ted Cruz, was reported to have given assurances to US refiners that the White House would not go ahead with the plan, but on Sunday Trump was still talking up the idea so it doesn’t seem to be ruled out yet.
In the Middle East Saudi Arabia has restored around half of the output of the East-West pipeline, around 4 mb/d of crude oil, following the attack a few weeks ago which ground exports via the critical pipeline to a standstill. In terms of other flows from the Middle East, ships have also used a US military-supervised route in the Strait of Hormuz along the coast of Oman. They shuttle at night with tracking systems turned off and offload to tankers outside the strait. There have not been any recent reports of attacks on vessels.
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