Brent at $76.60 as Hormuz tensions push crude to a weekly gain

Brent traded at $76.60 a barrel and WTI at $72.37 heading into the end of the week, both up on the week after US-Iran hostilities flared again. Rack prices tend to follow crude with a day or two of lag. A jobber who ran inventories thin through the June slide is looking at a refill at a higher number.

Size of the move

The gain was modest against what came before it. Both benchmarks had been selling off through June, and this week's bounce takes back part of that and no more. Irina Slav, writing for OilPrice.com, reads the muted response as a market that is still pricing a surplus.

The IEA warned that a renewed US-Iran conflict could upend its oil surplus forecast. That matters at the rack. A jobber who stays short and waits for the rack to come down to him is betting the surplus holds. If the agency pulls that call, buying hand-to-mouth gets riskier.

Nothing about Hormuz is settled. If the strait stays open, crude could ease back toward where it started the month. If the conflict escalates, the front of the curve could move quickly.

Eddystone LNG

Penn America Energy's dead plan for a Delaware River LNG export terminal is back, under a new company name and at a new site in Eddystone Borough, Pennsylvania. RBN Energy reports the developer never actually quit.

Northeast jobbers should care about the location more than the commodity. The Delaware River corridor is refined-product terminal country, and a large export project competes for river frontage and dock time. The project is at the announcement stage and nothing more. But a live LNG project on that stretch of water is a thing to track if your barrels come off a Philadelphia-area rack.

Russian refinery strikes

Ukrainian drones hit a Russian oil refinery and an oil terminal this week, according to Defense Express. An optomechanical plant was struck in the same round.

Refinery hits matter to US wholesale through diesel. Russian runs feed distillate into the same global pool that sets European gasoil, and when Europe gets short it pulls barrels off the US Gulf. Gulf Coast diesel racks tend to move ahead of the news cycle. A single strike is unlikely to move prices much. Repeated strikes would matter more.

What to watch

Two things. The Hormuz premium either holds past next week or bleeds out the way the last one did. And any Eddystone filing with the Delaware River Basin Commission would be the first sign the project is real rather than stalled again.