Heavy Reading Morning Digest

Late Tuesday a ballistic missile struck an administrative tower at Saudi Aramco's headquarters complex in Dhahran. Saudi Arabia's energy ministry confirmed an attack on an Aramco administrative building that caused a limited fire, with no casualties and petroleum production unaffected. Two more vessels, a container ship and a tanker, were struck by unknown projectiles in the Strait of Hormuz on Tuesday, and Iranian officials told Reuters Iran changed its tactics about 10 days ago to increase attacks on ships it considers in violation of its restrictions. Russia reported no strikes on Ukrainian energy targets on Tuesday, the first day since Sunday's ceasefire announcement, while strikes on other targets continued and no Russian diesel cargo has loaded. The diesel crack extended to $112.27, an eighth straight day above $100. Tuesday's settles split: WTI rose 0.4 percent and Brent fell 0.9 percent, and overnight both are bid. Canadian differentials traded again Tuesday: WCS December settled at -$25.55 and condensate December fell $1.00 to +$5.00.

Russia hit at least six Ukrainian energy targets on Monday, and Kyiv said Moscow is unwilling to accept the energy ceasefire announced Sunday. The market faded the announcement: Brent settled at $106.65 on Monday, its highest settle since September 15, before the overnight session gave back $1.69 on WTI and $1.58 on Brent on the prospect of Russian diesel supply. The diesel crack held above $100 for a seventh straight day at $104.46. Riyadh airport stayed closed all Monday with no reopening date, and Saudi Arabia's energy minister said the response must be equally serious. Gulf shut-ins from Hurricane Isaias fell to 29.63% of oil production on Monday. Canadian differentials had no price discovery on Monday: the ICE settles are a holiday carry, unchanged on zero volume.

Trump posted Sunday that Russia and Ukraine had agreed to an "energy ceasefire" effective immediately — no terms, Russia silent, Zelenskiy awaiting details and offering conditional acceptance. The overnight tape sold about $1.50 on both legs on the announcement. But the Gulf war widened Sunday: US forces struck Iranian military sites near the Strait for the second straight night, and three more tankers were hit, including the MT Petro Dolphin drone strike at Sohar with two crew missing. The Houthi airport campaign is now lethal: 12 dead and 309 injured at Riyadh airport Saturday, a second attack Sunday, and Dammam airport hit. The diesel crack held above $100 at $102.73. ICE (Oct 9): TMW Nov26 -$24.78, Dec26 -$25.60 still the widest tenor. The SPR 40 Mbbl exchange award is still pending.

Hurricane Isaias strengthened to 90 kt overnight with a Mobile-area landfall early Oct 10; BSEE shut-ins more than doubled Thursday to 1,282,879 b/d (62.89%) with 121 platforms evacuated. Thursday's session was the storm bid: WTI ~+$3.21, Brent ~+$4.08; overnight the tape gave back ~$1 on track uncertainty. The diesel crack's overnight print runs ~$111.60 (provisional). ICE (Oct 8): TMW Nov26 -$24.69, Dec26 -$25.35 still the widest tenor; ARV Nov26 -$15.93. The SPR exchange award is still pending; CFTC positioning releases today.

Hurricane Isaias (75 mph, possibly Cat 3) tracks toward a Mobile landfall early Oct 10 with ~511 kb/d of Gulf oil shut in; Houthi strikes killed three at Saudi airports and a tanker took projectiles north of Qatar. Wednesday's session was sold on the IEA agreeing to accelerate the strategic release and prioritize diesel: WTI settled $88.28 (-$1.16), Brent $100.20 (-$0.38); overnight Brent Dec ran back to ~$102.35 (+~2.2%). The diesel crack settled $105.87 Wednesday, its third straight close above $100. ICE (Oct 7): TMW Nov26 -$24.62, Dec26 -$25.15 still the widest tenor; ARV Nov26 -$15.69. EIA: crude drew 3.2 Mbbl vs +1.7 expected; Cushing built a third week.

Brent December traded around $101.6 overnight (+1%) and WTI around $90.2 (+0.9%) after Saudi Arabia confirmed Houthi strikes on Jazan and Najran airports and a Gulf of Mexico storm formed over offshore production. Tuesday's session had Brent trading down to a $97.06 intraday low before recovering to settle $100.58 (+$0.26); WTI settled $89.44 (DTN). The diesel crack settled $102.47 Tuesday; SPR exchange bids went in with no award announced yet.

WTI hovered near $89.33 overnight while Brent held around $100.28; Saudi Aramco cut its Arab Light official price for Asia to a six-year low as Middle East exports beat pre-war levels four days last week. The diesel crack settled back above $100 Monday ($101.47). Today's binary: SPR exchange bids due 11:00 a.m. Central.

OPEC+ held November targets steady on Sunday and crude faded on the overnight tape (WTI ~$89.69, Brent ~$101.67) while heating oil rose 1.4%, pushing the diesel crack back above $100 on the session print. ING marked the ICE gasoil crack $85 to $70. TMW Nov26 held -$24.13 (ICE, Oct 2) with December at -$24.65 the widest tenor; Joliet is confirmed back in service; the SPR exchange bids are due Tuesday.

Brent settled $102.31 after WSJ reported a third carrier strike group and up to 10,000 troops heading to the Gulf; TMW Nov26 settled -$23.75 (ICE, Oct 1) while WTI rallied, the prompt pricing a November-December egress crunch. Diesel crack $101.74, eighteen straight closes above $100. Pacific Link designated Canada's first project of national interest.

Gulf crude flows are back near pre-war levels and Brent fell to ~$96 in Asia before recovering; the product market is in full distress with record cracks. TMW Nov26 tightened 50c to -$21.60 while December sits widest at -$22.40, staring at the 40-million-barrel SPR exchange.