DTN Oil Update
Oil Futures Climb on Middle East Tensions
HOUSTON (DTN) -- Oil futures climbed Tuesday morning driven by a surge in geopolitical tensions in the Middle East as Israel broke the ceasefire by resuming attacks across Gaza again, days after U.S. President Donald Trump ordered airstrikes targeting Houthi rebels.
The April NYMEX WTI futures contract edged up by $0.47 to $68.05 bbl while the front-month ICE Brent futures contract rose by $0.51 to $71.58 bbl. April RBOB futures contract climbed by $0.0112 to $2.1924 gallon and April ULSD futures increased by $0.0203 to $2.2241 gallon.
The U.S. Dollar Index rose by 0.15% to 103.15 against a basket of foreign currencies.
Earlier on Tuesday, Israel launched deadly airstrikes across the Gaza Strip, marking a shift since a ceasefire took effect in January. Officials said the operation was open-ended and was expected to expand, according to the Associated Press. This comes after President Trump ordered air rides targeting Houthi rebels in Yemen over the weekend.
Separately, Russian President Vladimir Putin is expected to call President Trump today to discuss the possibility of a ceasefires with Ukraine. Last Wednesday, March 12, Putin suggested that he would agree, in principle, to stop hostilities against that country, under certain conditions. The administration of President Joe Biden imposed stricter sanctions on Russian oil trade, which remain in place.
Geopolitical events have set a bullish tone in the oil futures market this week, despite concerns over the potential impact of trade tariffs on the global economy and the possibility of a recession of the U.S. economy persist.
The market will be monitoring 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. Powell has stated that the Fed is in no rush to cut interest rates as the economy is doing well.
However, the Fed's decision could change due to inflationary pressures on the U.S. economy caused by punitive tariffs imposed by the Trump administration on its main trade partners in recent weeks.
So far, the United States has imposed 20% tariffs on imported goods from China, 25% on steel and aluminum imports from Canada and Mexico, 10% on Canadian energy and 25% on imports from the European Union.
