Oil News: Tanker Strikes, OPEC+ Hold Keep Crude Oil Buyers in Control

Tanker Strikes Pushed Oil Past Friday’s Highs

October WTI crude oil futures are trading near $92 early Monday after settling Friday at $91.48, up 18 cents or 0.20%. November Brent is near $96.80 after closing at $96.28, up 76 cents or 0.80%. Weekend tanker strikes between U.S. and Iranian forces drove both contracts higher on light Labor Day volume. Commercial ships are now part of the conflict and the market is not waiting around to see where this goes.

Brent showed the bigger move because the shipping risk is sitting directly on its supply chain. Both contracts added to Friday’s gains with the trends still up on the daily swing charts and no sign of a ceiling.

Commercial Ships Are Targets Now

U.S. forces struck three Iranian oil tankers Saturday and destroyed one near Kharg Island, Iran’s primary export terminal. Iran said its navy hit three tankers using unauthorized routes in the Strait of Hormuz and also targeted U.S. vessels in other waters. The fighting is in its seventh month and last week’s exchanges were the heaviest since July.

Washington said it would not negotiate until Iran stops attacking ships. That closes the door on any near-term de-escalation and keeps the risk premium locked into every barrel leaving the Persian Gulf.

Hormuz Traffic Dropped to Two Ships on Saturday

Two commodity vessels crossed the Strait of Hormuz on Saturday. Six made it through Sunday. Thursday’s count was four. The 10-day average is running near 10 ships per day, the lowest since May, and well below the recent pace near 15. Iran said it plans to announce a restricted zone outside the strait in the coming days, starting at the U.S. naval line and pushing into the Persian Gulf. Fewer ships and a smaller corridor is not a combination that takes risk premium out of crude.

OPEC+ Is Not Adding Barrels

OPEC+ met Sunday and left October production unchanged. The group said new quotas need to be set before any additional changes. That was the one decision that could have put fresh supply against the disruption trade. Tanker traffic through Hormuz is falling week over week. Iran is drawing up a restricted zone that would shrink the corridor further. Buyers needed a reason to take some of the premium off and OPEC+ did not give them one.

Inventories Were Already Tightening Before the Weekend

Commercial crude stocks fell 4.5 million barrels last week, the first draw in five weeks and bigger than the street expected. Refineries ran at 98% capacity, a rate the industry has not hit since 2018. WTI had a floor under it Friday on those numbers alone. The tanker strikes over the weekend just gave buyers another reason to stay.

Diesel is making the same argument from a different angle. Average U.S. prices reached a record near $5.85 a gallon. Middle East disruptions and Ukrainian attacks on Russian refineries have squeezed the fuel market on both ends.

Non-Farm Payrolls Did Not Break the Bid

Friday’s Non-Farm Payrolls report brought some selling into WTI but it did not stick. Employers added 162,000 jobs in August, well above the street estimate. The number raised the odds of a September Fed rate increase and a stronger dollar was the bearish argument for crude. It lasted about an hour. Falling inventories, high refinery runs, tight diesel, and an expanding naval conflict carried more weight than one employment print.

Daily October WTI Crude Oil Futures Technical Analysis

October WTI crude oil futures are moving higher early Monday. Since today is a bank holiday in the U.S. and trading is limited, it’s tough to say whether there will be a strong follow-through move today or if the early rally will extend into Tuesday’s session.

The main and minor trends are up on the daily swing chart. A trade through $93.14 will reaffirm both trends, with the psychological $100.00 level the primary upside target.

A trade through the minor swing bottom at $88.72 changes the minor trend to down, while shifting momentum to the downside. The main trend changes to down on a trade through $79.62.

Intermediate support is being provided by the 50-day moving average at $80.25. The 200-day moving average at $72.87 is long-term support.

Daily November Brent Crude Oil Futures Technical Analysis

November Brent crude oil futures are edging higher early Monday. The rise above Friday’s high has created a new minor bottom at $93.15.

Both the main and minor trends are up. A trade through $97.62 will reaffirm the uptrend. A trade through $93.15 will change the minor trend to down. This will shift momentum to the downside. The main trend changes to down if $85.56 fails as support.

Longer-term traders are viewing the 50-day moving average at $84.50 and the 200-day moving average at $77.41 as the major support levels and trend indicators.

What to Watch

Washington will not talk until the attacks stop. Iran is about to shrink the shipping corridor. OPEC+ held production flat Sunday. Crude inventories are drawing and diesel hit a record. That is four separate forces all pointed the same direction and none of them have a catalyst to reverse before Tuesday’s full session.

Both contracts are trending up and the minor swing bottoms are doing the structural work. WTI stays bullish above $88.72. Brent stays bullish above $93.15. Sellers are fighting the trend until one of those levels breaks.

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