Washington Is Moving Families Out Of Saudi Arabia While Its Oil Cushion Thins

On Wednesday the United States ordered some diplomats and their family members to leave its missions in Saudi Arabia, after drone attacks hit a civilian airport at Dammam and a Saudi oilfield, Reuters reported — and in early trading on Thursday, December Brent was near $112 a barrel, up about 3 percent, with WTI near $99, Oilprice reported.

Reuters said at least one person died and eight were wounded at the Dammam airport, and that a drone strike on a Saudi oilfield killed two. CBS News, citing Saudi aviation authorities and Saudi officials, put the Dammam toll at two dead and eight injured, and said the two oilfield deaths came from debris of an intercepted drone near Shaybah. Oilprice reported that field operations were unaffected. The Dammam tolls differ by one, and this letter cannot reconcile them.

The Houthis, the Iran-aligned group in Yemen, have expanded their strikes on Saudi Arabia, Oilprice reported. US officials told Reuters the State Department also plans to withdraw family members from several other American missions in the region.

On the water, Iran made its own claim. The navy of Iran’s IRGC said on Thursday that seven vessels, including oil tankers, were hit by its forces or by mines in the Persian Gulf over the previous day: four tankers doing oil transfers in the northern Gulf, and three vessels that struck mines west of the Strait of Hormuz, Oilprice reported. The claim was not independently verified. This letter attributes no attack to any party beyond what that party itself claims.

Talks have not ended. Foreign Minister Abbas Araghchi said on Wednesday that indirect negotiations continue through Pakistan and Qatar and that “the negotiating table remains in place,” CBS News reported. CBS also reported, citing US officials, that the US military is reducing its footprint in the Middle East; Central Command said it does not discuss related movements for operational security reasons.

That is the front the headlines will carry today. The second front is in the tanks.

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The Energy Information Administration’s weekly report, released Wednesday for the week ended 16 October, showed US commercial crude stocks down 3.06 million barrels to 412.5 million, Reuters reported; a Reuters poll had expected a draw of 820,000. Gasoline stocks fell 2.95 million barrels to 205.3 million. Distillates — diesel and heating oil — rose 1.68 million barrels to 104.3 million, though Oil & Gas Journal put them about 9 percent below the five-year average, and crude about 3 percent below it.

The Strategic Petroleum Reserve fell 300,000 barrels to 282.7 million, its lowest since October 1982, BigGo Finance reported, citing the EIA. Reuters had reported on 5 October a level of 283 million barrels, also the lowest since October 1982, on Energy Department data, and tied the drawdowns to a US agreement to release 172 million barrels. This letter did not open the EIA table, and the 282.7 figure rests on one aggregator.

On the same day the Energy Department offered to lend up to 315,000 barrels of ultra-low sulfur distillate from the 1-million-barrel Northeast Home Heating Oil Reserve, BigGo reported, citing the department. Bids are due 27 October and deliveries by 13 November, and borrowers must return the barrels plus a premium before the 2027-28 heating season. BigGo said Senators Susan Collins and Angus King had asked for the release, and put heating oil about 70 percent above its level a year ago.

The loan is small beside the reserve. It is large beside the date: twelve days from today, the midterm elections.

On one side, drones over Saudi oilfields. On the other, a reserve at its lowest since 1982, lent out in barrels.

Wednesday’s settlements, Reuters reported: December Brent at $108.82, up 3 cents, and December WTI at $97.15, down 67 cents. Cappnotes printed the same two levels. A note on yesterday’s letter, which gave Tuesday’s settlements as $109.11 and $98.21 on a single vendor’s figures: Reuters’ changes imply $108.79 and $97.82 for Tuesday. The gaps are 32 and 39 cents, and this letter cannot reconcile them.

On Wednesday the Dow closed at 52,856.09, up 0.69 percent, the S&P 500 at 7,757.17, up 0.58 percent, and the Nasdaq Composite at 26,702.86, up 1.05 percent, TradingKey and Cappnotes reported. Premarket on Thursday the picture reversed: S&P 500 futures were down between 0.9 and 1.1 percent and Nasdaq 100 futures down between 1.6 and 1.9 percent, depending on the source and the hour, Yahoo Finance and TradingKey reported. Futures do not say how the session will close.

The ten-year Treasury yield stood at 5.13 percent on Wednesday, up a basis point, Forbes Advisor and Cappnotes reported; a Yahoo Finance ticker showed 5.15 percent on Thursday morning without a timestamp. The Treasury sold $13 billion of twenty-year bonds on Wednesday at a high yield of 5.469 percent, a 0.9 basis point tail, with a bid-to-cover of 2.73 against a 2.62 average and indirect bidders taking 58.2 percent against a 65.2 average, Helious reported.

December gold futures were $4,150.00 at Wednesday’s close, Cappnotes reported, and fell between about 1.5 and 1.9 percent premarket, to between roughly $4,060 and $4,087 depending on the source. Kalshi and Polymarket prices put the chance of a rate hike at the Fed’s 28 October meeting near 11 percent at 7:25 a.m. ET on Thursday, Defirate reported. That is a market-implied probability, not a Fed signal.

AAA put regular gasoline at $4.2644 on 21 October, against $4.3333 a week ago and $3.0478 a year ago. Diesel stood at $6.3174, below the AAA record of $6.5276 set on 22 September.

This dossier wasn’t meant for everyone.