DTN Oil Update
WTI Climbs to $65 on Iran, Russia-Ukraine Concerns
SECAUCUS, N.J. (DTN) -- Oil futures recorded their largest one-day rise in four months on Wednesday, amid reports that the United States might be weighing military action against Iran, after OPEC's fourth largest exporter refused to halt its nuclear program during talks this week.
An abrupt break-off in U.S.-led negotiations to end the war between Russia and Ukraine also contributed to the upward pressure on global oil prices.
An unidentified adviser to U.S. President Donald Trump said there is a 90% likelihood the White House will approve "kinetic action" or military strikes against Iran. The U.S. would be preparing its military action, following the limited progress in recent nuclear talks between officials from Washington and Tehran.
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"It's that report, that the White House is poised to strike, which has oil rallying anew today after the mixed signals the market has gotten over the past two weeks," an energy hedge fund manager told DTN.
White House Press Secretary Karoline Leavitt told reporters there were many reasons and arguments one could make for a strike on Tehran, adding: "Iran would be wise to make a deal with President Trump."
Geopolitical strife has propped up crude prices this year despite a bearish 3.7 million barrels per day (bpd) surplus forecast by the International Energy Agency.
Data shows U.S. fuel stocks up 5% year-on-year as of Feb. 6. Market participants are awaiting further indications from weekly inventory of the American Petroleum Institute and U.S. Energy Information Administration, due later today and Thursday, respectively.
NYMEX WTI crude futures for March delivery settled up $2.86, or 4.6%, at $65.19 barrel (bbl). It was the U.S. crude benchmark's single largest percentage rise in a day since October 23, when it finished up 5.6%.
ICE Brent for April delivery rose by $2.71, or 4%, to $70.13 bbl.
Downstream, front-month ULSD futures advanced by $0.1213 to $2.5119 gallon, while RBOB for March delivery climbed by $0.0497 to $1.9641 gallon.
The U.S. Dollar Index soared by 0.515 points to 97.575 against a basket of foreign currencies.