US coastal grades rise as tensions escalate in the Middle East
USO•US coastal crude grades rose on worries that escalating Middle East tensions could curb supply. Brent futures settled up $4.28 at $102.31 a barrel, while WTI gained $2.45 to $92.87.
1. Supply concerns lift grades
US coastal crude grades rose on Thursday as dealers cited concerns that escalating Middle East tensions could curb supply. Mars Sour gained $1.75 to a midpoint premium of $1.50 to US crude futures; Light Louisiana Sweet eased 25 cents to a $2.25 premium, while WTI Midland and West Texas Sour were unchanged.
2. Tensions and crude prices
The United States was reportedly sending a third aircraft carrier and up to 10,000 additional troops to the Middle East as President Donald Trump weighed resuming strikes on Iran after the US midterm elections, a newspaper report said. Iran was preparing a broader response if large-scale US attacks resumed, sources said, while Iranian officials privately saw a diplomatic push as unlikely to succeed. Three Liberian-flagged oil tankers were struck by unknown projectiles while transiting the Strait of Hormuz, a shipping intelligence service said.
3. Brent-WTI spread
The Brent-WTI spread narrowed to as little as minus $9.58 before widening to minus $11.42. The article said a narrower spread discourages US crude exports, while high freight rates have curbed demand.
