DTN Oil Update
Oil Steadies as US Sees Ceasefire in Place After Clashes
VIENNA (DTN) -- Crude oil futures steadied Friday morning after renewed fighting between U.S. and Iranian forces halted a three-day decline fueled by prospects of an imminent peace deal and a gradual easing of the supply disruption.
Near 8:05 a.m. EDT, ICE Brent for July delivery was up $0.52 to trade near $100.58 bbl, and NYMEX WTI for June delivery rose $0.19 to $95.00 bbl.
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Downstream, NYMEX ULSD futures for June delivery advanced $0.0239 to $3.8405 gallon, and front-month NYMEX RBOB futures edged higher $0.0004 to $3.4564 gallon.
The U.S. Dollar Index softened by 0.110 points to 97.835 against a basket of foreign currencies.
Despite the current ceasefire, U.S. and Iranian forces exchanged fire in the Strait of Hormuz late Thursday. Both sides claimed to have responded in retaliation, while earlier reports suggested the U.S. military carried out attacks on Iranian ports. Abu Dhabi, meanwhile, said it intercepted a wave of Iranian drones and missiles.
U.S. President Donald Trump said shortly after the clash that the ceasefire remained in place, calling the U.S. strikes a "love tap." Tehran, meanwhile, said it considered the U.S. "aggression" a breach of the ceasefire.
Trump's comments helped cool the brief price rally sparked by the fresh outbreak of fighting, and oil and product futures were still on track for a steep weekly decline, the first in three weeks. Front-month Brent and WTI contracts were as of Friday morning eyeing a 7% week-on-week drop.
The now 10-week-old conflict has led to the largest oil supply disruption in history, depriving the world of around a fifth of petroleum liquids and LNG flows, sparking an unprecedented rally in crude futures, which soared to their highest since Russia's invasion of Ukraine in 2022.
The closure of the Strait of Hormuz also caused a rapid drawdown in global inventories, which have fallen from five-year highs at the beginning of the year to the lowest since 2018. The U.S. Energy Information Administration earlier this week reported that domestic distillate fuel oil stocks have slumped to a 20-year seasonal low.