Crude Prices Slump Amid Increased Oil Flows Through Strait of Hormuz
Crude oil prices have slipped as more oil flows through the Strait of Hormuz. The October WTI crude oil contract (CLV26) is down -0.35 (-0.42%) today, while October RBOB gasoline (RBV26) is up +0.0510 (+1.71%).
The decline in crude prices can be attributed to the dollar index ($DXY) reaching a 1-week high, putting pressure on crude. Additionally, signs of larger crude supplies transiting through the Strait of Hormuz are bearish for crude.
US Energy Secretary Chris Wright stated that the US is playing the long game with Iran, implying no plans to de-escalate the conflict and potentially limiting crude supplied from the Middle East.
The International Energy Agency (IEA) reported a global oil supply deficit that will worsen due to ongoing disruptions from the US-Iran war. Global oil inventories are expected to fall in Q3 at twice the previously estimated rate.