DTN Oil Update

Karim Bastati
DTN Analyst

VIENNA (DTN) -- Oil futures jumped close to 2% overnight on renewed fears of a broader conflict in the Middle East following reports of a potential imminent Israeli strike on Iranian nuclear facilities. A military escalation between the two nations would not only threaten Iranian oil supply but carries greater risks to the region's crude oil exports.

NYMEX-traded WTI for June delivery was up $0.42 bbl to trade near $62.45 bbl, and ICE Brent for July delivery rose $0.40 bbl to $65.78 bbl.

June RBOB gasoline futures gained $0.0130 to $2.1651 gallon, while the front-month ULSD futures contract was up $0.0163 to $2.1452 gallon.

The U.S. Dollar Index softened by 0.462 points to 99.515.

CNN on Tuesday reported that U.S. intelligence is seeing Israeli preparations to strike Iranian nuclear facilities. Aside from the threat to Iranian production and exports, the region being dragged into a wider conflict poses risks to supply stability of Middle Eastern oil more broadly. In addition, Iranian retaliatory measures, either via its armed proxies or by direct action in the Persian Gulf, could remove millions of barrels per day from the market. The 2019 Houthi strike on Saudi Arabian oil facilities briefly shut in close to half of Saudi oil production, and the group has in the past repeatedly targeted oil tankers heading to the Suez Canal. An Iranian blockade of the Strait of Hormuz, a vital transit point for around 20 million bpd of oil and oil products right at its doorstep, would shut in more than a fifth of global oil supply.