DTN Oil Update
Brent Nears $100 as Iran on Brink of Ceasefire Collapse
SECAUCUS, N.J. (DTN) -- Brent crude returned to near $100 barrel (bbl) Tuesday as U.S. President Donald Trump said he will not extend the ceasefire on Iran while Pakistan urged Tehran to send its negotiators to Islamabad to salvage the fragile peace arrangement.
NYMEX WTI crude for May delivery settled up $2.52, or nearly 3%, at $92.13 bbl, after an intraday high at $94.45.
Brent crude for June finished up $3, or just over 3%, at $98.48 bbl on ICE after coming within cents of $100, with a session high at $99.95.
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Among refined products, diesel proxy ULSD finished May trading on NYMEX up $0.1879 at $3.7288 gallon. In gasoline, NYMEX's May RBOB closed up $0.093 at $3.2098 gallon.
The U.S. Dollar Index gained 0.378 points against a basket of foreign currencies to 98.285 by 2:30 pm EDT.
"It's a case of wait-and-see ahead of the deadline for the Iran ceasefire agreement," said Fawad Razaqzada, analyst at StoneX in London. "There is a lot of uncertainty, and so oil prices have pushed higher."
Energy markets have been embroiled in a waiting game since the weekend to see if a new round of negotiations on the Middle East conflict will convene in the Pakistani capital before the ceasefire expires at 8:00 p.m. EDT Wednesday.
U.S. Vice President JD Vance was supposed to have returned to Islamabad on Monday but was in Washington as of Tuesday, reports said. Iran had also not confirmed its participation in a new round of talks, beyond making known its aversion to negotiating under pressure as the U.S. continued to blockade Iranian ports and Iranian vessels.
The Strait of Hormuz, transit point for 20 million barrels per day (bpd) of petroleum liquids that make up a fifth of world energy supply, was virtually abandoned on Tuesday after renewed strikes by Iranian gunboats in recent days on vessels on the waterway. Prior to the ceasefire announced April 4, there were about two dozen attacks on commercial vessels in the Gulf since the war that began on Feb. 28.
In Tuesday's trading, energy markets were on tenterhooks, both from the threat to floating oil supplies as well as the fear of fresh retaliatory attacks by Tehran on the energy infrastructure of its neighbors should the U.S. and Israel resume their bombing of Iran.
"We're ready to go militarily," President Trump said in a televised interview on Tuesday. Israeli Prime Minister Benjamin Netanyahu has said since last week that Israel's "finger remains on the trigger" where Iran is concerned. Iran's military, meanwhile, said it has "new cards on the battlefield" to play.
On the U.S. supply front, the American Petroleum Institute will release at 4:30 p.m. EDT its reading on crude, gasoline and distillate balances for the week ended April 17. In the prior week to April 10, the API said U.S. commercial crude oil stocks rose by 6.1 million bbl, rising for a seventh week in a row. Official data for the same week from the U.S. Energy Information Administration (EIA) showed a 900,000 bbl crude stock decline, the first such drop in eight weeks. The EIA will issue its reading for the week ended April 17 at 10:30 a.m. EDT Wednesday.