DTN Oil Update
Oil Futures Climb Due to Sanctions on Iranian Oil Trade
HOUSTON (DTN) -- Crude oil futures rose by more than $1 Thursday, reversing earlier losses, after the United States imposed additional sanctions on Iran's crude trade Thursday and despite commercial crude inventory build increased last week.
The April NYMEX WTI futures contract increased by $1.10 to $68.26 bbl while the front-month ICE Brent futures contract rose by $1.35 $72.13 bbl. April RBOB futures contract inched up $0.0230 to $2.1926 gallon and April ULSD futures increased by $0.0194 to $2.2513 gallon.
The U.S. Dollar Index rose by 0.41% to 103.50 against a basket of foreign currencies.
The U.S Department of State said that the Trump administration set the "fourth round of sanctions targeting Iranian oil sales to stop the flow of revenue the regime uses to fund their destabilizing activities."
The DOE imposed Thursday sanctions against a crude oil and petroleum products storage terminal in the port of Huizhou in China, which presumably acquired Iranian oil.
Additional sanctions on Iranian, Russian and Venezuelan oil trade are expected to limit supplies and put upward pressure on global oil futures. The bullish sentiment was supported by geopolitical events in the Middle East, as Israel resumed attacks on Gaza and the Trump administration ordered airstrikes in Yemen over the weekend.
However, the administration Energy Information Administration and American Petroleum Institute data showed another weekly build of commercial crude inventory, while gasoline and distillate supply stocks declined again last week.
The EIA reported on Wednesday, March 19, commercial crude oil inventories in the U.S. rose by 1.7 million bbl to 437 million bbl in the week ending March 14. This was below the 4.593 million bbl build reported by API for the same reference week.
Gasoline stocks dropped to a seven-week low by falling 500,000 bbl week-over-week to reach 240.6 million bbl, in the week ended March 14, above the 1.71 million bbl decrease reported by API for the same period.
Distillate fuel stocks recorded the steepest draw by falling 2.8 million bbl to 114.8 million bbl last week, according to EIA, which was larger than the 1.14 million bbl fall API reported for the same week.
