DTN Oil Update
Oil Rebounds on Iran's Threat to Abandon Ceasefire
SECAUCUS, N.J. (DTN) -- Crude and product futures rebounded Thursday from the selloff of the previous session as tensions flared again in the Middle East from Iran's threat to abandon a ceasefire with the U.S. and Israel if its ally Lebanon remains under attack.
"Israeli strikes on Lebanon violate the ceasefire agreement," Iran's President Masoud Pezeshkian said. "Attacks on Lebanon would deem ceasefire negotiations meaningless. Iran will not abandon the Lebanese people."
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Israel and the U.S. say Lebanon was not part of the two-week ceasefire deal with Iran.
Mohammad Eslami, head of the Atomic Energy Organization of Iran also said Tehran viewed its "right to enrich uranium" as a non-negotiable component of any long-term peace deal. This adds a layer of complexity to peace talks scheduled in Pakistan at the weekend, as both Israel and the U.S. forbid Iran from nuclear development initiatives.
Attention was also on the Strait of Hormuz, the Middle East's oil shipment artery where tanker transit remained at a virtual standstill despite U.S. demands that Iran reopen the waterway under the two-week ceasefire agreement.
Only one oil products tanker and five dry bulk carriers were reported to have traversed the strait in the last 24 hours, compared to the typical average of 140 vessels daily carrying a total of some 20 million barrels per day of petroleum liquids.
Iran announced alternative routes for maritime traffic in the Persian Gulf, citing the risk of sea mines on the Hormuz, which it has effectively blockaded through most of the 40-day conflict in the region. Reports cited Iranian officials as demanding a toll of $1 for every barrel (bbl) carried through the Hormuz, sparking protests from the Trump administration and adding to the upward pressure on oil prices in Thursday's session.
By 8:45 a.m. ET, the NYMEX WTI futures contract for May delivery was up $5.20, or 5.5%, to $99.61 bbl after a 16% decline in the prior session.
ICE Brent for June rose $3.72, or 4%, to $98.47 bbl, after settling down 13% Wednesday.
Downstream, RBOB futures for May delivery advanced by $0.0606 to $ 3.0665 gallon while front-month ULSD futures climbed by $0.2022 to $4.0106 gallon.
The U.S. Dollar Index fell by 0.220 points to 98.705 against a basket of foreign currencies.