DTN Oil Update
Oil Futures Climb on Geopolitical Events; Brent Trades at $71
HOUSTON (DTN) -- Crude oil futures rose Monday morning amid news of a possible ceasefire in the Russia-Ukraine war and after U.S. President Donald Trump ordered air raids on various towns in Yemen to attack Houthi rebels during the weekend.
The front-month NYMEX WTI futures contract edged up by $0.58 to $67.76 barrel (bbl) while the ICE Brent futures contract for May delivery increased by $0.61 to $71.19 bbl. April RBOB futures contract rose by $0.0282 to $2.1769 gallon and April ULSD futures climbed by $0.0262 to $2.1928 gallon.
The U.S. Dollar Index remained bearish by dropping 0.18% to 103.5 against a basket of foreign currencies.
On Thursday, March 13, Russian President Vladimir Putin said he agreed, in principle, with the United States' proposal to stop hostilities against Ukraine for a 30-day ceasefire, under the condition to discuss it first with the Trump administration. The oil futures market responded positively to this announcement, even though stricter sanctions on Russian oil trade, imposed by the administration of President Joe Biden, remain in place.
Meanwhile, Trump ordered a series of air raids on the Houthi-held areas in Yemen on Saturday "promising to use 'overwhelming lethal force' until Iran-backed rebels cease their attacks on shipping along a vital maritime corridor," the Associated Press reported.
Domestically, market participants will focus on the Federal Reserve meeting scheduled for Tuesday and Wednesday, when its chair, Jerome Powell, is expected to announce the Fed's decision on interest rates. Last month, during his testimony before Congress, Powell stated there was no hurry to cut interest rates as the economy was in a good place.
However, after the United States imposed 20% tariffs on imported goods from China and 25% on steel and aluminum imports from Canada and Mexico, inflationary pressures and the possibility of a recession are expected to influence the Fed's decision this week.
