DTN Oil Update
Oil Dips as Israel Media Hints at Looming Iran Ceasefire
SECAUCUS, N.J. (DTN) -- Crude futures dipped Wednesday amid conflicting reports on whether the U.S. and Iran were in talks to find a solution to the more than three-week long Middle East conflict, with Israeli media suggesting an impending ceasefire.
NYMEX WTI for May delivery settled down $2.03 at $90.32 barrel (bbl), after a session low at $86.46. ICE Brent for May closed down $2.27at $102.22 bbl, off the intraday low of $97.15.
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Downstream, NYMEX ULSD for April delivery retreated by $0.2846 to end at $4.0063 gallon. Front-month NYMEX RBOB gasoline declined by $0.1356 to $3.0124 gallon.
Energy markets initially tumbled on reports that Iran had received a 15-point U.S. peace proposal. But Tehran denied it was in any diplomatic process with the U.S. and that it was still defending itself from attacks by Israel.
"Iran has no intention to hold talks with the U.S.," Iranian Foreign Minister Abbas Araghchi said. "The exchange of messages via mediators does not mean negotiation with the U.S."
White House Press Secretary Karoline Leavitt also said the White House had not confirmed the existence of the 15-point peace report, despite saying there were "elements of truth" to it. She also said it was too early to decide if the Trump administration was satisfied with the progress of the war and the changes brought to Iran by the U.S.-Israel military campaign.
Israeli television, however, said Trump could announce a ceasefire "by next Saturday".
The conflict that began on Feb. 27 has severely cut into the oil production and exports of OPEC members in the region, creating what the International Energy Agency labeled as the largest supply disruption in history.
The Strait of Hormuz remains a primary flashpoint, with most shippers avoiding the waterway that typically handles approximately 20 million bpd of petroleum liquids. Analysts warn that even if a ceasefire allows transit to resume, regional crude production will likely require months to recover to pre-war output levels.
Iraqi officials said output in the country's prolific southern fields has fallen about 80% as storage hit capacity from the Hormuz blockade. BP and Eni have been told to cut production at major Iraq fields, said the officials, warning of further rationing if regional disruptions persist.