DTN Oil Update
Oil Futures Mixed, US Sanctioned Iranian Oil Trade
HOUSTON (DTN) -- Oil crude futures closed mixed on Thursday after the U.S. Department of Treasury imposed new sanctions on Iranian oil trade.
The Department of Treasury Thursday announced sanctions on "an international network for facilitating the shipment of millions of barrels of Iranian crude oil worth hundreds of millions of dollars to the People's Republic of China."
"The oil was shipped on behalf of Iran's Armed Forces General Staff and Sepehr Energy Jahan Nama Pars," according to the Treasury's statement. Sanctions include entities and individuals from China, India and the United Arab Emirates, as well as several vessels.
U.S. President Donald Trump recently reinstated "maximum pressure" campaign against Iran, which seeks to have zero Iranian oil exports.
This action, in addition to stricter sanctions on Russian oil trade, is expected to affect global supply-demand balance, putting upward pressure in international oil prices.
However, oil crude future prices reacted negatively Thursday despite the announcement of additional sanctions on Iranian oil trade, as U.S. inventory levels continued climbing last week.
The front-month NYMEX WTI futures contract fell by $0.49 to $70.54 bbl while the April ICE Brent futures contract increased by $0.37 to $74.24 bbl.
Wednesday, Feb. 5, the Energy Information Administration reported that commercial crude oil inventories in the U.S. rose by 8.7 million bbl to 423.8 million bbl in the week ended Jan. 31.
This exceeded the 5.025 million bbl increase reported by American Petroleum Institute for commercial crude oil inventory in the same reference week.
EIA reported that gasoline stocks rose by 2.2 million bbl week-over-week to reach 251.1 million bbl, while distillate fuel stocks fell by 5.5 million bbl to 118.5 million bbl last week.
Downstream, March RBOB futures contract rose by $0.0231 to $2.0738 gallon while ULSD futures contract for March delivery increased by $0.0206 to $2.4048 gallon.
The U.S. Dollar Index strengthened, rising by 0.10% to 107.55 against a basket of foreign currencies.
Maria Eugenia Garcia can be reached at Maria.Garcia@dtn.com
