DTN Oil Update
Oil Futures Rise on U.S.-Iran Peace Deal Proposal
HOUSTON (DTN) -- Crude oil futures settled higher on Thursday, reversing an early sell-off driven by expectations of a U.S.-Iran peace deal and a potential reopening of the Strait of Hormuz.
The front-month ICE Brent rose by $0.81 to $102.08 bbl, and NYMEX WTI for June delivery edged up by $1.51 to $96.59 bbl.
The NYMEX ULSD futures for June delivery climbed by $0.1177 to $3.9033 gallon, and the front-month NYMEX RBOB futures retreated $0.0482 to $3.5075 gallon.
The U.S. Dollar Index rose by 0.160 points to 98.035 against a basket of foreign currencies.
On Thursday, media reports indicated that Iran was reviewing the U.S. proposal to end the conflict, which has now entered its third month.
According to Reuters, citing sources and officials, the proposal would unfold in three stages: formally ending the war, resolving the crisis in the Strait of Hormuz and launching a 30-day window for negotiations on a broader agreement.
Shipping traffic in the Strait of Hormuz remains restricted, with only seven vessels crossing the waterway on May 6, according to vessel-tracking data.
Trump is scheduled to meet Chinese President Xi Jinping for a two-day summit in Beijing next week. China, the main consumer of Iranian oil, has been vocal in urging restraint from the warring parties and in calling for a reopening of the Strait of Hormuz.
Declining U.S. inventories reported by the Energy Information Administration on Wednesday, supported the rise in oil futures during today's session.
U.S. commercial crude oil stocks dropped on the week ended May 1 for a second consecutive week, while distillate fuel inventories plunged to their lowest level in 20 years, according to EIA data. Gasoline and jet fuel inventories also edged down.
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