DTN Oil Update
Oil Futures Rose Following Sanctions on Iranian Oil Trade
HOUSTON (DTN) -- Oil futures rose Friday morning following new sanctions the U.S. Department of Treasury imposed on Iranian oil trade, amid some optimism about the outcome of the trade tariff war between the U.S. and China.
"Most of the tariff shock from last weekend has been absorbed, and markets are also probably reconsidering the optimism on a US-China deal. Beijing's retaliatory tariffs are due to come into effect on Monday, and the chances of a de-escalation before then have decreased," said Francesco Pesole, FX strategist at ING Research, in a report.
The front-month NYMEX WTI futures contract rose by $0.62 to $71.23 bbl while the April ICE Brent futures contract increased by $0.52 to $74.81 bbl. March RBOB futures contract rose by $0.0122 to $2.0869 gallon while ULSD futures contract for March delivery increased by $0.0127 to $2.4107 gallon.
In the opposite direction, the U.S. Dollar Index dropped by 0.32% to 107.515 against a basket of foreign currencies.
Thursday, Feb. 6, the Department of Treasury 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."
According to the Treasury statement, the Iranian crude was shipped on behalf of Iran's Armed Forces General Staff and Sepehr Energy Jahan Nama Pars. The U.S. sanctions are targeting entities and individuals from China, India and the United Arab Emirates, as well as several vessels.
U.S. President Donald Trump reinstated a "maximum pressure" campaign against Iran, aiming to reduce Iranian oil exports to zero.
Stricter sanctions on Russian and Iranian oil trade are expected to affect global supply-demand balance, putting upward pressure in international oil prices.
Friday morning, the U.S. Bureau of Labor Statistics reported that total non-farm payroll employment rose by 143,000 in January, and the unemployment rate edged down to 4%. Both figures were below the market expectations of 169,000 and 4.1%, respectively.
Job gains occurred in healthcare, retail trade and social assistance, while employment dropped in the mining, quarrying and oil and gas extraction industry, the BLS said.
Maria Eugenia Garcia can be reached at Maria.Garcia@dtn.com
