Brent Fades Gain as Hostilities Ease, RBOB Slips on Demand

Brian L Milne
By  Brian L. Milne , DTN Refined Fuels Editor

CRANBURY, N.J. (DTN) -- Oil futures nearest delivery on the New York Mercantile Exchange (NYMEX) and Brent crude on the Intercontinental Exchange settled Friday's session shallowly mixed after spiking overnight in response to what has been characterized as an Israeli retaliatory attack in Iran following an Iranian attack against Israel over the past weekend.

ICE June Brent futures rallied to $90.75 barrels (bbl) overnight on concern Tehran would respond to the attack on Iranian soil, potentially triggering a broader war in the oil-rich Middle East. Instead, news reports note Tehran is playing down the overnight attack, with Brent falling to a $86.19 bbl low intraday. At settlement, June Brent edged up $0.18 to $87.29 bbl.

The U.S. crude benchmark gained $0.41 to $83.14 bbl, with NYMEX May West Texas Intermediate futures widening the prompt premium to $0.92 bbl ahead of expiration in the afternoon April 22. The U.S. dollar ended flat at 105.984 in index trade against a basket of foreign currencies, easing from 106.325 6-1/2 month high on April 16 as the prospect of interest rate cuts is pushed back on sticky inflation. The Federal Open Market Committee is not expected to reduce the federal funds rate until September, according to the CME FedWatch Tool. Some in the market think the central bank will leave the key overnight bank borrowing rate, now in a 5.25% by 5.5% target range, unchanged in 2024.

NYMEX May RBOB futures eased $0.0034 with a $ 2.7103-gallon settlement Friday as weak demand undermined recent bullish bets for the gasoline contract. RBOB fell below trendline support, now at $2.8146 per gallon, on Wednesday following data from the Energy Information Administration showing gasoline supplied to the U.S. market averaging 8.806 million barrels per day (bpd) during the four weeks ended April 12, down 168,000 bpd or 1.9% against the comparable year-ago period.

May ULSD futures on NYMEX edged $0.0074 higher to $2.5413 gallon after testing support at the $2.5075-gallon 2024 low in early trading. The prospect of increased demand from the agriculture sector for planting encouraged buying sentiment.

Brian L. Milne can be reached at brian.milne@dtn.com.

Brian Milne