DTN Oil Update
Oil Steady as Middle East Jitters Offset US Crude Build
SECAUCUS, N.J. (DTN) -- Oil and product futures closed little changed Wednesday as fears of military action against major OPEC member Iran offset a massive build in weekly crude inventories reported by the U.S. Energy Information Administration (EIA).
Crude prices remained near seven-month highs as Iranian Foreign Minister Abbas Araqchi's team departed for talks in Geneva on Thursday, Feb. 26, with White House negotiators determined to pressure Tehran into dismantling its nuclear program.
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Analysts noted that it may be Iran's final diplomatic opportunity to avert military action from the U.S., which has assembled two aircraft carriers, 150 fighter jets and some 1,200 missiles in Middle East waters. Iran is both OPEC's fourth largest producer and exporter.
"Where market attention is concerned, geopolitical tensions over Iran are clearly winning over U.S. inventories," a hedge fund manager in oil told DTN.
The EIA said U.S. commercial crude oil stocks jumped by 16 million bbl last week to 435.8 million, accounting for the largest weekly increase in three years.
Crude inventories have been volatile over the past month amid snowstorms in the U.S. Midwest to Northeast that hit production in the Permian Basin and other oil producing patches.
Last week's crude build was accompanied by a 900,000 bbl stockpile growth at the Cushing, Oklahoma delivery point for NYMEX West Texas Intermediate futures.
In product inventory, gasoline fell by 1.0 million bbl to 254.8 million for the week ended Feb. 20, while distillate fuel oil balances retreated by 300,000 bbl to 120.4 million.
At Wednesday's settlement, NYMEX WTI for April delivery slipped by $0.21 to $65.42 bbl, while the front-month ICE Brent futures contract advanced by $0.08 to $70.85 bbl.
Downstream, RBOB futures for March settled up $0.0200 at $1.9914. ULSD front-month contract finished down $0.0129 at $2.6740 gallon.
The U.S. Dollar Index edged down 0.125 points to 97.645 against a basket of currencies.