DTN Oil Update
Crude Hits $100 as Tanker Attacks Shut Gulf Oil Terminals
SECAUCUS, N.J. (DTN) -- Crude prices continued climbing on Thursday, with NYMEX West Texas Intermediate surpassing the $95 bbl mark and ICE Brent trading above $100, after two oil tankers were attacked, forcing the closure of oil terminals in the Persian Gulf as the Iran war escalates.
By 8:45 a.m. EDT, WTI crude futures for April delivery were up by $6.07 to $93.32 bbl after a session high at $ 95.97. Brent crude for May delivery advanced by $6.50, or 7%, to $98.48 bbl after peaking at $101.59.
Downstream, NYMEX RBOB futures for April delivery rose $0.1086 to $2.8969 gallon. NYMEX ULSD futures for April soared $0.2580 to $3.9368 gallon.
The upside in oil prices was partly muted by the announcement on Wednesday, March 11, by the International Energy Agency that the world's largest oil consumers will release a record 400 million bbl from their emergency reserves to mitigate a worsening global supply crisis. Separately, U.S. President Donald Trump said an additional 172 million bbl will be released from the nation's Strategic Petroleum Reserve.
Reports on Thursday said Iraq has halted all operations at its oil ports after fuel spilled into the sea during attacks on two tankers in its territorial waters that killed a sailor. Footage of the vessels engulfed in flames flashed across news channels and social media platforms as Iran reiterated its warning that ships stay off the Strait of Hormuz where some 21 million bpd of petroleum liquids pass.
Oman was also reported to have evacuated all vessels from a key oil export terminal as precaution following a wave of attacks on ships in the region. China, meanwhile, issued a ban on exports of all refined fuel through March to prevent a potential domestic fuel shortage.
Taken together, the developments showed disruptions from the near two-week long conflict in the Middle East spilling beyond the region as the U.S. and Israeli forces kept up with their bombardment of Iran and Tehran responded by striking at oil facilities, airports and military bases of its neighboring who were U.S. allies.
"Once a conflict extends beyond the initial shock phase, oil markets tend to shift from pricing uncertainty to pricing endurance," research house ANZ said in a note. "At that point, the key question is no longer whether supply is disrupted, but how long producers can physically sustain output under deteriorating operating conditions."
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