DTN Oil Update
Oil Dips as US Issues 30-Day Waiver on Russian Sanctions
SECAUCUS, N.J. (DTN) -- Crude prices dipped Friday as the U.S. temporarily lifted sanctions on Russian oil for a month to ease a global supply crunch caused by the two-week long Iran war.
News that at least one tanker had crossed the Strait of Hormuz without incident, despite Iran effectively blocking the waterway, helped eased concerns about safety on the Middle East's busiest oil shipping.
P[L1] D[0x0] M[300x250] OOP[F] ADUNIT[] T[]
By 8:30 a.m. EDT, NYMEX WTI crude futures for April delivery were down $1.85, or 2%, to $99.93 bbl. It had hit a session high at $98.09 earlier.
NYMEX Brent crude for May delivery slipped by $0.98, or 1%, to $99.48 bbl after peaking at $102.73.
For the week though, both the U.S. and global crude benchmarks pointed to a third straight week of gains, with WTI up 2.6% and Brent 7%, extending advances for a fourth straight week.
Downstream, NYMEX RBOB futures for April delivery fell $0.0235 to $2.9411 gallon. NYMEX ULSD futures for April retreated by $0.0498 to $3.8491 gallon.
The U.S. Dollar Index, meanwhile, strengthened by 0.376 points to 100.13, adding to the weight on commodity markets.
Energy markets fell across the board after the U.S. Treasury issued on Thursday, March 12, a 30-day license permitting countries to purchase sanctioned Russian oil and petroleum products currently stranded at sea. Previously, the treasury had announced a similar waiver exclusively for Indian buyers of Russian oil.
Russian presidential envoy Kirill Dmitriev said the Treasury move would make available as much as 100 million bbls -- or roughly a day's worth of global output -- now at sea.
Upward price pressure also eased after news that a single Indian tanker exited the Hormuz. The strait, which until the start of U.S.-Israel attacks on Iran on Feb. 27 had seen a movement of 21 million bpd of petroleum liquids, has been off-limits as Iranian forces fired at tankers transiting the narrow passage on the Persian Gulf. Iran's new supreme leader Mojtaba Khameini said Thursday energy markets will remain a war leverage for the regime.
Oil prices had been volatile the past 48 hours after the announcements of a combined release of 572 million bbls by the International Energy Agency and the U.S. coincided with attacks on tankers in the Persian Gulf. The U.S. has also offered to shield vessels that had to navigate the Hormuz.