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Headline: Morning Oil Outlook: Russia Dangles More Diesel and Oil’s Rally Snaps

Mike Moore

Mike Moore

— 3 min read
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Headline: Morning Oil Outlook: Russia Dangles More Diesel and Oil’s Rally Snaps
Photo by Mark Boss / Unsplash

Well, that didn’t last long. Oil’s three-day run ended overnight, with Brent sliding 1.77% to $104.77 a barrel early Tuesday. The reason? Russia hinted it might ship even more diesel than President Trump announced. That was enough for traders to let some air out.

The numbers, quick:

Brent’s at $104.77, off 1.77%. WTI is $91.86, down $1.88 (2%). U.S. heating oil, which is basically a stand-in for diesel, sits around $4.70 a gallon. It’s down 0.57%, its third drop in a row.

Quick refresher if you’re new here. Brent is the global benchmark, and WTI (West Texas Intermediate) is the main U.S. price. Both jumped nearly $2 Monday, and Brent closed at its highest since Sept. 15. So today mostly just hands that back.

So what changed overnight

Late Monday, Russian Deputy Prime Minister Alexander Novak said Russia could push diesel exports past what Trump laid out. His number was 3 million to 3.5 million metric tons a month by year-end. Compare that to Friday, when Trump said Russia would send more than 300,000 tons right away. His administration also temporarily lifted U.S. sanctions on Russian fuel.

Not everybody’s thrilled. Seven senators, four Republicans and three Democrats, put out a joint statement Sunday saying “The Administration must immediately reverse course.” Trump’s not moving an inch. Monday morning he wrote, “I made the right choice for the American People.”

Why hasn’t oil fallen harder? The Gulf, mostly. Houthi missiles hit Riyadh’s main airport over the weekend, and there are fresh reports of tanker attacks near the Strait of Hormuz. Traders are jumpy. Tim Waterer of KCM Trade said “Until we see clearer signs of de-escalation, the path of least resistance still leans higher.”

Then there’s demand, the part not many people are talking about. OPEC Secretary General Haitham Al Ghais said Monday the group now sees 2026 demand growth of 400,000 barrels per day. At the start of the year? 1.4 million bpd. That’s a real haircut, and it gives prices room to cool off whenever the war news goes quiet.

What I’m watching

Honestly, today’s a headline day. Does the Russia-Ukraine energy ceasefire hold? Any new Houthi or Hormuz attacks? ING isn’t sold on the ceasefire part, saying “there is considerable scepticism over the Russia-Ukraine energy ceasefire.”

The actual data piles up midweek. Columbus Day pushed the weekly inventory reports back a day, so API (American Petroleum Institute) numbers land Wednesday at 4:30 p.m. Eastern. The government’s Energy Information Administration (EIA) report follows Thursday at noon. Wednesday also brings September CPI inflation at 8:30 a.m. Eastern, plus the International Energy Agency’s monthly oil market report. So, busy couple days.

Sources:

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