DTN Oil Update
Crude Oil Futures Climb on Stricter Sanctions on Iranian Oil
HOUSTON (DTN) -- Crude oil futures increased Monday morning amid expectations of global supply tightness due to stricter sanctions on Iranian oil trade and the proximity of a deadline set by the United States to impose additional tariffs on some of its main trade partners.
The front-month NYMEX WTI futures contract rose by $0.22 to $68.50 bbl, while the ICE Brent futures contract for May delivery increased by $0.20 $72.36 bbl. In the opposite direction, April RBOB futures contract fell by $0.0054 to $2.1900 gallon and April ULSD futures decreased by $0.0039 to $2.2457 gallon.
The U.S. Dollar Index rose by 0.46% to 103.79 against a basket of foreign currencies.
Despite the high volatility in the oil futures markets, driven by concerns over the potential impact of trade tariffs on the global economy and the possibility of a recession in the U.S., the two main crude benchmarks moved to a bullish ground last week. However, some analysts remain bearish, lowering their forecast for oil crude prices to $60 per barrel on expectations of global weak demand.
"After recently rebounding from the $65 level, a decisive close below $63.80 would confirm further downside potential, opening the way toward key support levels at $60, $55, and, in more extreme scenarios, $49," said Razan Hilal, market analyst at Forex, in a note.
The market is expecting the announcement of new tariffs next week. April 2 marks the deadline set by the Trump administration to announce reciprocal trade tariffs on China, Canada, Mexico and the European Union, all of which have imposed retaliatory tariffs on U.S. products.
However, some participants expect an increase in oil futures to be supported by limited supplies, driven by stricter sanction imposed by the U.S. government on Russia, Iranian and Venezuelan oil sales.
Last week, the U.S Department of State imposed sanctions on China-based Shandong Shouguang Luqing Petrochemical Co., Ltd., a teapot oil refinery, "for purchasing and refining hundreds of millions of dollars' worth of Iranian crude oil." The sanctions include 12 entities and one individual, as well as eight vessels shipping millions of barrels of Iranian oil to China.
Separately, geopolitical events continue to weigh on oil market sentiment. Last week, U.S. President Donald Trump and Russian President Vladimir Putin agreed to seek a limited ceasefire targeting energy and infrastructure in Ukraine while Israel resumed airstrikes across the Gaza Strip, breaking a ceasefire that took effect in January.
