DTN Oil Update
Oil Futures Surge on Tighter Global Supply
HOUSTON (DTN) -- Oil futures surged Friday with both WTI and Brent reaching their highest levels in seven days amid expectations of tighter supplies, despite increased vessel traffic through the Strait of Hormuz and a U.S.-China agreement emphasizing that the key global oil and gas shipping waterway should remain open.
The front-month NYMEX WTI futures contract rose $4.25, or 4.20%, to $105.42 bbl, while the July ICE Brent futures contract climbed $3.62, or 3.42%, to $109.34 bbl.
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In refined products trading, June ULSD futures advanced $0.1539 to $4.0595 gallon, the front-month RBOB futures contract rose $0.1046 to $4.0102 gallon.
The U.S. Dollar Index strengthened 0.482 points to 99.210 against a basket of currencies.
Iranian media reported that roughly 30 vessels transited the Strait of Hormuz on Thursday, May 14, after Tehran had allowed some Chinese ships to pass through the shipping route.
According to the International Energy Agency, global oil supply fell 1.8 million bpd in April to 95.1 million bpd as a result of the Iran conflict and the ongoing closure of the Strait of Hormuz, bringing cumulative supply losses since February to 12.8 million bpd.
"Assuming flows through the Strait gradually resume from June, global oil supply is projected to decline by 3.9 million bpd on average in 2026, to 102.2 million bpd," the EIA said.
U.S. President Donald Trump concluded his three-day visit to China, saying his meeting with Chinese President Xi Jinping resulted in "fantastic trade deals." However, details of such agreements were not disclosed.
The summit took place more than a year after the Trump administration imposed a baseline 10% tariff on most Chinese good imported into the U.S., prompting retaliatory measures from China and escalating trade tensions between both countries.
