DTN Oil Update
Oil Rises as Iran Denies US Talk Claims, Attacks Continue
VIENNA (DTN) -- Oil prices advanced Tuesday morning after Iran denied U.S. claims of negotiations and Israeli and Iranian attacks continued. Brent plunged 11% in the prior session on hopes of a diplomatic resolution to the U.S.-Israeli war on Iran spurred by U.S. President Donald Trump postponing strikes on Iranian energy infrastructure for a five-day period on alleged ongoing back-channel talks with senior Iranian officials.
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Senior Iranian leadership on Monday denied claims of talks with the U.S., saying the country will continue to defend itself against military aggression. Israeli Defense minister Israel Katz said Tuesday the country was continuing its attacks on Iran at full force. Iran overnight launched attacks on Israel and on U.S. bases in the Middle East. U.S. strikes also continued, as the five-day pause seemingly applied only to Iranian energy infrastructure.
Meanwhile, thousands of U.S. troops were set to arrive in the region just as Trump's 48-hour ultimatum expired today. The President and senior White House officials have in the past openly mulled to occupy Kharg Island, home to vast oil storage and terminals, and the vital conduit for currently 90% of Iranian oil exports. U.S. forces struck more than 90 military installations on the island in an attack ten days ago.
Tanker traffic through Strait of Hormuz has been at a trickle for the last three weeks. More than 20 million bpd of petroleum liquids transited the chokepoint before the war. While Saudi Arabia and the United Arab Emirates were able to reroute some crude exports to ports in the Red Sea and the Gulf of Oman, up to 10 million bpd of crude oil and virtually all product exports from the Persian Gulf remained shut in.
Near 8:00 a.m. EDT, WTI for May delivery was up $2.78 to $90.91 bbl, and Brent for May delivery advanced $2.34 to $102.28 bbl.
ULSD futures for April delivery rose 4%, or $0.1651, to $4.2211 gallon, and front-month RBOB futures added $0.1095 to $3.0844 gallon.
The U.S. Dollar Index strengthened by 0.365 points to 99.09 against a basket of foreign currencies.