DTN Oil Update
Brent, WTI Record Monthly, Q1 Rise, Fueled by Iran War
SECAUCUS, N.J. (DTN) -- Brent crude futures posted record high advances for March and the first quarter on Tuesday, while NYMEX West Texas Intermediate had its largest rise since the 2020 pandemic, as the Middle East conflict shaped the outcome of energy trading through the month.
ULSD and RBOB futures also posted double-digit milestones for the month, and quarter as refined product markets were squeezed by crude flows disrupted by Iran's blockade of the Strait of Hormuz, where some 20 million bpd of petroleum liquids transit.
"Gasoline is now up 40% in a month and hitting $4 per gallon at U.S. pumps for the first time since March of 2022, during Covid," Phil Davis, founder of PSW Investments, observed in a note. "Iran is, meanwhile, telling every shipping company, insurer, and port operator in the Gulf that nowhere is safe."
P[L1] D[0x0] M[300x250] OOP[F] ADUNIT[] T[]
Energy markets broadly fell in Tuesday's session despite the outsized monthly and quarterly gains. NYMEX WTI futures for May delivery settled at $101.38 bbl, $1.50, or 1.5%, lower on the day. It rose 52% on the month and 78% on the quarter.
The ICE Brent futures contract for May dropped $5.57, or 4.9%, to $118.35 bbl. This was a 63% monthly increase and 94% for the quarter. The spread between Brent May and June contracts widened to nearly $14 from Monday's level to around $10, indicating prompt demand for oil.
Downstream, NYMEX ULSD futures for April settled at $4.1634 gallon, down by $0.2009, or 4.6%, but surged rose 60% for the month and more than double on the quarter.
NYMEX RBOB for April closed at $3.3123 gallon, lower by $0.0392, while recording gains of 45% for March and 69% on the first quarter.
The U.S. Dollar Index softened by 0.618 points to 99.735 against a basket of foreign currencies.
During the month-long U.S.-Israel airstrikes campaign against Iran, U.S. President Donald Trump has alternated between signals of escalation and de-escalation, amid a war that has significantly degraded Iran's military capabilities and leadership ranks. Trump has also warned that potential next targets would include Kharg Island, the nerve center of Iran's oil and gas industry, and the country's power plants.
Trump has prepared for a reinforcement of U.S. troops to the Middle East that would take total personnel deployment to around 50,000, to lay the ground for what observers think is a ground invasion. But the president, who has bristled at the lack of support from the U.K. and other U.S. allies for the war, has also told aides he was considering ending the war even if the Hormuz remains largely closed to tanker traffic, the Wall Street Journal reported.
Iran has so far defied Trump's calls for peace. In recent days, it rejected a 15-point truce plan presented by Pakistani mediators. On Tuesday, it set a Kuwaiti oil tanker ablaze in the port of Dubai.
In domestic economic news, the Conference Board said Tuesday U.S. consumer confidence rose by 0.8 points to 91.8 in March, above forecasts of 87.5, despite the Middle East conflict.
Market participants are also focused on U.S. crude inventory data due from the American Petroleum Institute at 4.30 p.m. EDT. The API will be reporting balances for crude, gasoline and distillates for the week ended March 27. In the prior week to March 20, the API said crude stocks climbed for a fourth consecutive week, rising by 2.3 million bbl.