DTN Oil Update
Oil Rises as Flows Slow Amid US Strikes, Iranian Threats
VIENNA (DTN) -- Oil and product futures edged higher Thursday morning, with crude futures hovering near one-month highs after rallying by as much as 12% this week.
By 08:10 a.m. EDT, ICE Brent for September delivery was up $0.27 to trade near $85.22 barrel (bbl), and NYMEX WTI for August delivery rose $0.44 to $80.04 bbl.
Downstream, NYMEX ULSD futures for August delivery advanced $0.0472 to $3.9955 gallon, and front-month RBOB futures rose $0.0374 to $3.3383 gallon.
The U.S. Dollar Index inched higher by 0.066 points to 100.34 against a basket of foreign currencies.
Oil exports from the Persian Gulf have slowed amid the most recent military escalation, but a handful of tankers continued to traverse the Strait of Hormuz via the U.S.-protected corridor along the Omani coast, easing concerns over an immediate supply shock.
The U.S., meanwhile, launched new strikes on Iran, as well as on an Iran-flagged VLCC that was signaling for the country's main oil export hub at Kharg Island. U.S. President Donald Trump has in recent days repeatedly threatened to widen the scope of attacks should Iran not reopen the strait, and mentioned the possibility of striking bridges, power plants and other energy infrastructure.
In reaction, Iran's Islamic Revolutionary Guard Corps reiterated its threat of closing other vital shipping lanes via its proxies, first and foremost Bab-el-Mandeb, which connects the Red Sea to the Gulf of Aden. The Tehran-aligned Houthi militia in Yemen has in the past attacked ships attempting to cross the strait at the Horn of Africa, forcing shippers to reroute around the Cape of Good Hope.
A large diesel inventory build in the U.S., meanwhile, last week snapped a 16-week draw streak in total petroleum inventories, Energy Information Administration data released Wednesday showed. Crude oil inventories, however, continued to decline amid strong domestic refiner demand, and gasoline stockpiles, already at a 14-year seasonal low, receded further as well. At 210.5 million bbl, nationwide gasoline inventories are now 9.6% below year-ago levels and 8.4% below the seasonal five-year average.
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