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Oil holds near two-week lows as diesel cracks hit record high
Brent was supported by record gasoil premiums, while diesel refining margins rose on expectations the US could restrict diesel exports to curb high prices.
Oil prices stayed close to their lowest levels in more than two weeks, Reuters reported on Wednesday, as improving Gulf crude supplies weighed on crude benchmarks. Brent crude futures rose 1.16% to $100.40 a barrel by 1143 GMT, while West Texas Intermediate gained 0.42% to $90.90.
Brent hit a low not seen since Sept. 8 at $97.36 in the prior session, and WTI also touched its lowest since Sept. 1 earlier in the day. Despite the softer crude trend, diesel refining margins reached a record high, helped by potential restrictions to US diesel exports.
European low-sulphur gasoil's premium to Brent crude futures climbed to a record around $95 a barrel, after US President Donald Trump backed the idea of a diesel export ban amid diesel prices that have hit record highs on a global supply shortage. Reuters said Europe has been highly dependent on diesel and jet fuel imports from the US since disruption to Middle East supplies.
Analysts warned an export ban may not reduce energy prices and could intensify supply and economic disruptions. Reuters also cited Saudi Arabia resuming operations on its East-West pipeline to the Red Sea on Tuesday after it was shut Sept. 11 due to drone attacks, along with Iraq increasing exports to more than 3 million bpd and aiming to boost volumes via Turkey to over 600,000 bpd.
Latest closeWTI crude $90.73 ▼4.1%|Brent $96.22 ▼3.0%