DTN Oil Update
Oil Extends Rise on Dimming Peace Prospects, Fresh Attacks
VIENNA (DTN) -- Crude oil futures rose to their highest in nearly two weeks Monday morning on escalation fears fueled by fresh drone attacks in the Middle East and renewed threats out of Washington D.C. and Tehran.
Near 7:15 a.m. EDT, ICE Brent for July delivery was up $1.43 to trade near $110.69 bbl, after reaching $112 bbl earlier in the session, the highest since May 5. The NYMEX WTI contract for June rose $1.41 to $106.83 bbl on its penultimate trading day, and WTI for July delivery advanced $1.55 to $102.57 bbl.
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Downstream, NYMEX ULSD futures for June delivery added $0.0710 to $4.1244 gallon, and front-month NYMEX RBOB futures gained $0.0312 to $3.7331 gallon.
The U.S. Dollar Index was little changed, down 0.055 points to 99.155 against a basket of foreign currencies.
On Sunday, the United Arab Emirates reported damages to a nuclear power plant following a drone strike. The UAE and Saudi Arabia said they had intercepted several more drones. Authorities were still investigating whether the attacks came from Iran or one of its regional proxies.
U.S. President Donald Trump, meanwhile, issued a new warning toward Tehran on Sunday, posting on social media that Iran "better get moving, FAST, or there won't be anything left of them."
Israel also continued to launch attacks on Lebanon despite the existing ceasefire, which on Friday was extended for 45 days. Iran in early April briefly allowed traffic through the Strait of Hormuz in response to the initial ceasefire announcement between Israel and Lebanon. The cessation of Israeli attacks on Lebanon was a core Iranian condition for further negotiations with the U.S.
Oil prices rose 7% last week on dimming prospects of a negotiated permanent resolution to the U.S.-Israeli war on Iran which led to the largest oil supply disruption in history. Iran has since the start of the conflict in late February effectively halted commercial traffic through the Strait of Hormuz, shutting in a fifth of global petroleum liquids supply. The U.S. blockade of Iranian maritime trade, meanwhile, on Monday entered its fifth week.
The head of the International Energy Agency on Monday warned that commercial oil inventories were rapidly depleting and would only cover a few more weeks of demand. He said that the release of strategic petroleum reserves has added some 2.5 million bpd to global oil supply, which has been in a steep deficit for more than two and a half months.