DTN Oil Update
Oil Futures Up Amid New US Sanctions on Iranian Oil Trade
TACOMA, Wash. (DTN) -- Oil futures settled higher on Thursday on expectations of supply tightness, after the U.S. Treasury Department imposed new sanctions targeting a second independent Chinese refinery accused of processing Iranian crude.
The NYMEX WTI futures contract for May delivery settled at $64.28 per barrel (bbl), up $1.81 from Wednesday's settle of $62.47, while the front-month ICE Brent settled at $67.56 per bbl, gaining $1.71 from $65.85.
Refined product futures also moved higher. May RBOB gasoline futures settled at $2.0895 gallon, up $0.0461 from $2.0434 the previous session. May ULSD futures settled at $2.1452 gallon, gaining $0.0298 from Wednesday's settle of $2.1154.
The U.S. dollar index remained steady from Wednesday at 99.145, against a basket of foreign currencies.
Additional support came from Wednesday's Energy Information Administration report showing a draw in crude stocks at the Cushing, Oklahoma, delivery hub, alongside declines in refined domestic product inventories.
On Wednesday, media reports said that a second independent refinery in China's Shandong Province was sanctioned by the Trump administration, as it received dozens of shipments of crude oil from Iran worth more than $1 billion. Some of the petroleum came from a front company for Iran's paramilitary Revolutionary Guard, U.S. authorities said, according to the Associated Press.
Sanctions on Iranian, Venezuelan and Russian crude imposed by the United States have been expected to limit supplies and put upward pressure on oil futures prices.
However, the additional 2.2 million barrels per day of oil output from OPEC-plus countries, released earlier this month, and additional volume expected in May are expected to set a bearish tone in the oil futures market in the coming weeks.
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