DTN Oil Update

Barani Krishnan
DTN Refined Fuels Market Reporter

SECAUCUS, N.J. (DTN) -- Crude and product futures slid Friday but still ended with large advances for the week as the chance for a swift conclusion to the Middle East conflict appeared dim amid the largest oil supply disruption in history.

NYMEX WTI crude for June delivery settled the day down $1.45, or 1.5%, at $94.40 bbl, and ICE Brent crude for June finished lower by $0.26, or 0.3%, at $105.33 bbl. For the week, WTI was up almost 12% while Brent rose 15% in the same period.

Among refined products, NYMEX ULSD futures for May delivery ended the session down $0.1008 at $3.8874 gallon. Front-month NYMEX RBOB futures finished lower by $0.4253 at $3.8874 gallon.

The U.S. Dollar Index retreated by 0.237 points to 98.365 against a basket of foreign currencies by 2:55 p.m. EDT.

This week's rebound in oil futures came after two back-to-back weekly declines totaling 26% in WTI and 17% in Brent amid on-off and on-again efforts by the U.S. to bring Iran to the negotiation table in Pakistan for an end to the near two-month long Middle East conflict.

The White House said on Friday that negotiators Steven Witkoff and Jared Kushner will leave for Islamabad on Saturday, April 25, to effort another round of talks with Iran.

Iranian media said Foreign Minister Abbas Araghchi and Parliament Speaker Mohammad Bagher Ghalibaf will travel to the Pakistani capital as well after making stops in Oman and Russia -- both allies of Tehran -- to apparently shore up regional and international support for its position at the talks that could take place on Sunday.

The Strait of Hormuz, meanwhile, remained impassable to tankers that used to carry 20 million bpd of petroleum liquids that make up about a fifth of world supply. Iran has blocked the waterway on its side while the U.S. is forbidding any ship from entering or leaving Iranian ports.

"With the Strait of Hormuz closed, the market is losing 10 to 14 million barrels per day," said Phil Flynn at the Price Futures Group. "Analysts warn of potential diesel and jet fuel shortages in places like California. Some firms are calling for dramatically higher prices."

For a peace deal, the U.S. demands that Iran unconditionally reopen the strait and permanently cease all uranium enrichment. Iran, in return, demands the lifting of the U.S. naval blockade on its ports for talks to even begin, adding that it had a "civilian" right to nuclear enrichment.

While the Hormuz remains closed, the White House extended its Jones Act waiver for three months Friday to facilitate international tanker transport of energy and agricultural products. This extension follows an initial 60-day waiver launched in mid-March to stabilize domestic prices and maritime logistics.