DTN Oil Update
Oil at 6-Month High on US-Iran Escalation Concerns
VIENNA (DTN) -- Oil and product futures extended their rally on Thursday, hitting six-month highs, as concerns of an imminent U.S. attack on Iran reemerged.
Reports of increased military activity in the Middle East, including a buildup of Israeli arsenal on top of U.S. warships already positioned in the region's waters, have kept energy markets on tenterhooks since the start of this week.
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Oil prices surged as diplomatic U.S. efforts to persuade an Iran apparently unwilling to dismantle its nuclear program transitioned to reports of planned U.S. strikes.
White House Press Secretary Karoline Leavitt told reporters on Wednesday, Feb. 18, many reasons and arguments could be made for a strike on Tehran and that it would be wise for Iran to make a deal promptly with the Trump administration.
A report on Thursday said U.S. Secretary of State Marco Rubio was set to meet Israeli Prime Minister Benjamin Netanyahu at the end of the month to discuss Iran, and that the build-up of U.S. forces in the Middle East should be completed by mid-March.
War against Iran could send oil prices spiraling higher, given its standing as OPEC's fourth largest exporter in a region that produces a third of the world's crude supply.
In Thursday's morning session, NYMEX WTI crude futures for March delivery rose $1.38 to $66.57 bbl, after reaching a six-month high of $66.7 bbl earlier. The U.S. crude benchmark rose nearly 5% in the previous session, its most in a day since Oct. 23.
ICE Brent for April delivery advanced $1.31 to $71.66 bbl, the highest since early August.
Downstream, front-month ULSD futures were up $0.0468 to $2.5655 gallon, and RBOB for March delivery rose $0.0186 to $1.9866 gallon.
The U.S. Dollar Index strengthened by 0.275 points to 97.895 against a basket of foreign currencies.