DTN Oil Update
Oil Softens as Initial Attacks Spare Oil Infrastructure
VIENNA (DTN) -- Oil futures softened Monday morning, erasing gains made Friday in reaction to large-scale Israeli attacks on Iran. These strikes have so far not affected oil flows and have not targeted critical export infrastructure.
NYMEX-traded WTI for July fell $0.93 bbl to trade near $72.05 bbl, and ICE Brent for August delivery softened by $0.89 bbl to $73.34 bbl.
July RBOB gasoline futures shed $0.0141 to $2.2135 gallon, while the front-month ULSD futures contract advanced $0.0069 to trade near $2.3656 gallon.
The U.S. Dollar Index fell by 0.241 points to 97.935.
Oil futures surged more than 7% on Friday in reaction to the military escalation. While Iranian energy infrastructure remains a potential target, it has largely been spared in the initial waves of air strikes, easing supply fears. The conflict, however, has the potential to threaten more than just Iranian oil exports. Iranian retaliatory measures, either via its armed proxies or by direct action in the Persian Gulf, could remove millions of barrels per day from the market. The 2019 Houthi strike on Saudi Arabian oil facilities briefly shut in close to half of Saudi oil production, and the group has in the past repeatedly targeted oil tankers heading to the Suez Canal. An Iranian blockade of the Strait of Hormuz, a vital transit point for around 20 million bpd of oil and oil products right at its doorstep, would shut in more than a fifth of global oil supply.
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