Two sets of barrels come off the market

Happy FRIDAY, ladies and gentlemen. Two sets of barrels came off the market this week, one to missiles and one to weather.

Brent is at about USD 103 after yesterday’s escalations pushed it up as much as 5.7% intraday. Nine vessels have reportedly been hit in the Strait of Hormuz over the past week, and the US naval blockade of Iranian ports remains in place, as we note in today’s War Watch, below. The barrel is down 3.9% over the month and up about 65% on the year.

Hurricane Isaias has shut in 62.9% of US Gulf offshore oil output, roughly 1.28 mn bbl / d, up from a quarter on Wednesday, along with 57.4% of gas production. Operators have evacuated 121 of the Gulf’s 371 manned platforms. Shell has shut Mars, Olympus, Ursa, Vito and Appomattox, and Chevron has suspended four offshore sites. The first Atlantic hurricane of the season sat 380 miles south of the mouth of the Mississippi on Thursday morning with 85 mph winds, and landfall on the northern Gulf Coast is expected late today or early tomorrow. The G7’s 100 mn-barrel reserve release, agreed a week ago, is being drawn into exactly this.

On the non-oil side of things: Riyadh and Abu Dhabi signed a preliminary agreement on rail links and electricity interconnection, according to The National, with UAE Investment Minister Mohamed Alsuwaidi and Saudi Energy Minister Prince Abdulaziz bin Salman putting their names to it in Riyadh. It sets a framework for moving goods and cargo by rail across the border, commissions feasibility studies on linking the two networks, covers cooperation on exchanging and selling power, and provides for coordination with the rest of the GCC on the wider Gulf grid. There are no figures, timelines or named projects in the agreement, which comes 10 days after Sheikh Mansour’s visit to Riyadh reopened the conversation. –Salma