Donna Dong
The May’26 Brent futures contract has gained strength this afternoon, from $102.40/bbl at 12:30 GMT to $104.22/bbl at 16:40 GMT (time of writing).
In the news, Valero Energy Corp has closed its 380kb/d oil refinery in Port Arthur, Texas, after an explosion and fire occurred at a diesel hydrotreater unit. According to local networks, the fire has been extinguished, and a shelter-in-place order has been lifted. The cause of the explosion is not yet clear, though sources have claimed that the blast could be heard more than 10 miles away. In Manila, Philippine President Ferdinand Marcos Jr declared a national energy emergency due to the Middle East conflict and what he termed an "imminent danger" to the country's energy supply. He announced the formation of a committee to oversee the orderly movement, supply, distribution, and availability of fuel, food, medicines, agricultural products, and other essential goods. In other news, crude oil exports from Saudi Arabia's Red Sea port of Yanbu surged to nearly 4mb/d, significantly higher than pre-Iran war levels. The surge in exports illustrates Saudi Aramco’s progress in sending crude along its East-West pipeline to keep supplies moving. In geopolitical news, Indian Prime Minister Narendra Modi and US President Donald Trump have spoken by phone today, discussing the Middle East situation and emphasising the importance of keeping the Strait of Hormuz open, according to separate posts on X by US envoy to India Sergio Gor and Modi. Finally, the front-month (May/Jun) and 6-month (May/Nov) spreads are at $4.25/bbl and $19.42/bbl, respectively.