DTN Oil Update
Oil Prices Surge on US-Iran Escalation, Tanker Hits
VIENNA (DTN) -- Oil futures extended their rise Tuesday morning as the U.S.-Iran conflict continued to escalate, including reciprocal strikes and Iranian attacks on two oil tankers in the Strait of Hormuz.
By 8:30 a.m. ET, ICE Brent for September delivery was up $3.02 to trade near $86.32 bbl, and NYMEX WTI for August delivery rose $1.76 to $79.90 bbl.
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Downstream, NYMEX ULSD futures for August delivery advanced $0.1219 to $3.9455 gallon, and front-month RBOB futures rose $0.0788 to $3.2451 gallon.
The U.S. Dollar Index softened by 0.19 points to 100.85 against a basket of foreign currencies.
Crude oil futures have over the past two trading days soared to a four-week high amid renewed supply concerns amid a crumbling U.S.-Iranian ceasefire. Brent's front-month contract was as of Tuesday morning up 14% from Friday's close. Diesel prices jumped even more, with ULSD for August delivery trading at an almost eight-week high.
ADNOC, the United Arab Emirates' state oil company, on Tuesday claimed that three of its oil tankers were attacked by Iran as they were shuttling crude oil in the Strait of Hormuz with their transponders turned off.
Shippers have reverted to sailing "in the dark" over the past few days after Tehran declared the Strait closed following a flare-up in U.S. and Iranian attacks. Ship tracking data showed visible crossings plummeting to a two-month low in recent days, but the volume of dark flows, particularly of Iranian oil, remained hard to gauge.
Adding to supply concerns, the U.S. reinstated its blockade of Iranian ports after last week lifting a 60-day sanctions waiver on Iranian energy exports granted as part of the memorandum of understanding signed by both countries.
The ongoing global refined products supply crunch, which is set to deepen from both Ukraine stepping up its attacks on Russian refineries and choked off flows from the Persian Gulf, has kept U.S. fuel inventories unusually depressed and prices sticky. The U.S. Energy Information Administration last week reported that nationwide gasoline stockpiles have fallen to a 14-year seasonal low 212 million bbl. Weekly inventory estimates by the American Petroleum Institute are scheduled to be released this afternoon, followed by official government data on Wednesday, July 15.