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Oil gains over $1 on possible shipping disruptions

Oil prices acquired on Monday as European diesel demand, constrained by Russian sanctions and delivering disruptions, pulled prices higher in a market jittery with U.S. refinery output restricted by prepared overhauls, experts stated.

Brent unrefined futures settled with a gain of 91 cents, or 1.11%, at $82.53 a barrel. U.S. West Texas Intermediate crude futures (WTI) finished up $1.09, or 1.43%, at $77.58.

We're all watching the diesel, said John Kilduff, partner with Again Capital LLC.

A downturn in U.S. refining activity and disruptions to global trade have tightened diesel materials in recent weeks, moistening historically high U.S. diesel exports to Europe this month.

U.S. diesel fractures quickly rose to a four-month high of more than $48 a barrel this month, crimping arbitrage opportunities to deliver the fuel to Europe.

Iran-aligned Houthi rebels in Yemen narrowly missed striking a U.S.-flagged tanker on Saturday, the U.S. Central Command said. Another vessel hit by the rebels last week was abandoned and has actually been seen leaking fuel in the Red Sea.

Possible interruptions are what's haunting this market, Kilduff stated.

While early trade on Monday was driven by fears about relentless inflation restricting need, the focus relocated to a more standard problem, said Phil Flynn, analyst and Price Futures Group.

We appear to be slipping back to the supply side concern, Flynn stated. Demand is extremely strong and at the end of the day, it has to do with supply and need.

Refiners are likewise expected to start restoring production in March following the completion of prepared plant overhauls at U.S. refineries, he said.

U.S. refinery utilization has been at 80.6% of nationwide capability for the previous two weeks, the U.S. Energy Info Administration stated recently.

Oil costs have been trading between $70 and $90 a barrel given that November, as rising U.S. supply and issue over weak Chinese demand offset OPEC+ supply cuts despite wars raving in Ukraine and Gaza.

As the Israel-Hamas dispute continues in the Middle East, White Home national security adviser Jake Sullivan informed CNN on Sunday that negotiators for the United States, Egypt, Qatar and Israel had agreed on the basic shapes of a hostage deal throughout talks in Paris but were still in negotiations.

(source: Reuters)