Oil prices set for 6.1% weekly gain as US-Iran tensions intensify; average US diesel hits $5.85/gallon record

Oil markets are projected to finish the week with Brent crude up 6.1% and West Texas Intermediate (WTI) climbing 8.3%, following a Friday decline. These gains stem from resuming military exchanges between the United States and Iran, now in its seventh month. On Friday alone, Brent futures fell 0.24% to $95.29, while WTI dropped 0.59% to $90.76. Despite this, analyst Tim Waterer noted that risk premiums have already increased even if actual tanker flows through the Strait of Hormuz remain relatively stable. US average diesel prices hit a record high of $5.85 per gallon in mid-September. This compares to $3.71 per gallon one year prior and exceeds previous highs set during the war with Russia. Claudio Galimberti, chief economist at Rystad Energy, stated that high diesel costs drive expectations of continued inflation. Government bond yields remain elevated due to this inflation pressure. Although the US government claims Middle Eastern oil flows are near normal, tanker trackers suggest supply disruptions continue due to attacks on facilities and regional hostilities.