DTN Oil Update
Oil Prices on Track for Weekly Rise as War Woes Grow
VIENNA (DTN) -- Oil futures edged lower Friday but continued to hover near six-month highs and were on track for the first weekly gain in three weeks on concerns of a military escalation between the U.S. and Iran.
On their last day of trading, NYMEX traded WTI futures for March delivery softened $0.18 to $66.25 bbl, and the contract for April fell $0.24 to $66.16 bbl. ICE Brent for April delivery retreated $0.27 to $71.39 bbl.
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Downstream, front-month RBOB futures were flat at $2.0065 gallon. ULSD futures bucked the trend, advancing $0.0145 to $2.6292 gallon.
The U.S. Dollar Index was little changed, up 0.03 points to 97.885 against a basket of foreign currencies.
Crude prices have rallied to six-month highs this week as an increasingly bellicose tone from the White House toward Iran fueled supply concerns. The U.S. has over the past month and a half amassed the largest military force in the Middle East since the invasion of Iraq in 2003, and more U.S. war ships are expected to arrive in the region in the next two weeks.
On Thursday, U.S. President Donald Trump gave Iran "10 to 15 days" to reach a deal over its nuclear program, saying otherwise "bad things will happen to them." The Wall Street Journal meanwhile reported that the President was weighing a "limited strike" ahead of the deadline to pressure Tehran into an agreement.
Iran produces some 3.2 million bpd of crude oil, and could temporarily shut down the Strait of Hormuz, a vital choke point through which a fifth of global waterborne oil flows transit daily. Iran is also neighboring the largest oil producers in the Middle East, a region responsible for one third of global crude oil supply.
An inventory report by the U.S. Energy Information Administration showing across-the-board draws to crude oil and fuel inventories lent some price support. Commercial crude oil inventories fell by 9 million bbls in the week ended Feb. 13, and distillate fuel oil stocks shrank by 4.6 million bbls. Nationwide gasoline inventories recorded the first draw of the year, receding by 3.2 million bbls.
In the U.S., higher-than-expected inflation and lower-than-expected economic growth weighed on sentiment. The Bureau of Economic Analysis's first of three estimates of U.S. GDP growth in the fourth quarter of 2025 published today showed a reading of 1.4% quarter-on-quarter, compared with market expectations of 2.8%. BEA's PCE price index, the Federal Reserve's preferred metric to gauge inflation, was up 0.4% month-on-month in December. The core PCE price index, which excludes price volatile categories like food and energy, was at 3% year-on-year, the highest reading since November 2023.