DTN Oil Update
Oil Up 5th Straight Week on Middle East Escalation Fear
SECAUCUS, N.J. (DTN) -- Oil prices reversed a volatile early Friday session to settle up for a fifth consecutive week amid media reports that U.S. President Donald Trump has been presented with options for a U.S. ground battle in Iran that could dramatically escalate the current conflict in the Middle East.
Crude and fuel futures, mixed in choppy trading earlier on Friday, rose decisively on the reports, which were not immediately verified by the White House.
NYMEX WTI for April delivery settled up $2.18, or 2.7%, at $98.32 bbl. For the week, the U.S. crude benchmark rose 1.5%, pushing its March advance alone to 47%.
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ICE Brent for May delivery closed up $3.54, or 3.2%, at $108.29 bbl. The global crude benchmark was up 7.5% on the week, rounding up its March rise to 52%.
The Brent-WTI spread hit a nearly six-year high above $16 bbl this week as the Brent futures pricing surged on concerns of a steep oil supply tightness caused by an extension of the conflict in the Middle East.
U.S. crude stocks, meanwhile, neared two-year highs last week, pressuring WTI futures lower. On Friday, the Brent-WTI spread hovered between $13 and $14 bbl.
Downstream, NYMEX ULSD futures for April delivery climbed $0.2664 to $4.6084 gallon, and front-month RBOB futures advanced $0.2448 to $3.2862 gallon.
The U.S. Dollar Index strengthened by 0.347 points to 99.405 against a basket of foreign currencies.
The bullish sentiment in the oil futures market followed reports that senior U.S. military commanders have submitted specific requests aimed at preparing for a ground invasion of Iran as, President Trump deliberates next moves in the three-week long U.S.-Israel military campaign.
The Pentagon was reported to be sending three more warships and roughly 2,200 to 2,500 troops from California to the U.S. Central Command that was responsible for all American forces in the Middle East.
Energy prices have surged broadly on supply outages triggered by U.S.-Israeli airstrikes on Iran and retaliatory strikes by Tehran on oil and gas infrastructure of its neighbors. Iran has also blockaded the Strait of Hormuz, the artery for Middle East oil and 21 million of petroleum liquids supply.
Iraq was reported to have declared force majeure on Friday on all oilfields developed by foreign oil companies. Iraqi oil minister Hayyan Abdul Ghani also said production at the Basra Oil Company had been slashed from 3.3 million bpd to 900,000 bpd since the curtailment of exports from the country's southern ports.