DTN Oil Update
Oil Dips on Iran Truce Hopes Despite Trump Threats
SECAUCUS, N.J. (DTN) -- Oil and product futures dipped Monday on expectations of a potential truce over Iran despite U.S. President Donald Trump's warning that there will be unrestrained attacks on the country's energy infrastructure if it did not reopen the Strait of Hormuz by Tuesday.
Energy traders also appeared comforted by reports of tankers bearing French, Japanese and other flags being allowed by Tehran to transit the Hormuz waterway that is integral to a fifth of global petroleum cargoes.
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Near 9 a.m. EDT, the NYMEX WTI futures contract for May delivery was at $110.31 bbl, down $1.23, or 1.1%, on the day. It rose 11% last week in the first trading week of April. ICE Brent futures contract for June were at $108.45 bbl, down $1.40, or 0.5%, on the session. The spread between the two benchmarks remained in WTI's favor, after shifting to that structure last week for the first time since 2022.
Among refined products, RBOB futures for May delivery slipped by $0.04690 to $3.2411 gallon. Front-month ULSD futures fell by $0.0088 to $4.3523 gallon.
The U.S. Dollar Index softened by 0.140 points to 99.715 against a basket of foreign currencies.
Oil prices retreated from the highs of last week after media reports on Monday said Pakistani mediators -- following overnight contacts with U.S. and Iranian officials -- expect a ceasefire that will allow the Hormuz, now virtually under Tehran's control, to reopen. That initiative will be followed by talks on a broader settlement to be concluded within 15 to 20 days, the reports added.
Tehran has used a mix of military strikes and opaque vetting to control tanker traffic through strait which connects oil from various Middle East exporters with the Persian Gulf and rest of the world's waterways.
Iran and Oman, which border the Hormuz along with the UAE, were reportedly finalizing on Sunday, April 5, a formal protocol for transit on the strait, viewed by analysts as a precursor to the first-ever toll collection on vessels in the region.
Trump has vacillated between demands that Iran reopen the strait and saying that it does not matter much to the U.S., which receives only 10% of its oil from the Middle East.