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Crude and gasoline rally as US-Iran de-escalation hopes fade
WTI settled up 2.6% and gasoline rose 2.7% after the dollar index fell to a 2.3-month low and Middle East supply disruptions stayed in focus.
Crude oil and gasoline prices jumped to three week highs on Monday, with September WTI crude (CLU26) closing up 2.10 cents per barrel, or 2.6%, and September RBOB gasoline (RBU26) settling up 0.0860, or 2.7%, according to Yahoo Finance. The rally was driven by renewed concerns that US-Iran tensions will remain unresolved, potentially keeping Middle East crude supplies constrained. Yahoo Finance cited remarks from US Energy Secretary Chris Wright suggesting the US is pursuing a long-term approach with Iran, implying no near-term de-escalation. Support also came as fresh Israeli attacks on Iran-backed Hezbollah in Lebanon and additional strikes involving Iran-backed groups in Gaza, plus attacks on ships in the Red Sea by Yemen-based Houthis, kept the risks elevated. The article also pointed to vessel incidents near the Strait of Hormuz. Although crude prices saw brief pressure on signals of larger-than-expected crude volumes leaving the Persian Gulf, Yahoo Finance said the situation remains fluid, with signs that Iran and Oman are close to a deal to reopen the Strait of Hormuz. It added that US data and vessel tracking showed about 9 million barrels per day moving through the strait over the past seven days, higher than expectations of 4 million bpd, while some tankers shifted to so-called dark transits.
Latest closeWTI crude $82.40 ▲1.4%|Gasoline (RBOB) $2.901 ▼7.3%