Oil Steady Near 2-Wk Highs on U.S.-Iran Talks Uncertainty


   
Karim Bastati
DTN Analyst

   VIENNA (DTN) -- Oil and product futures were little changed in a volatile 
morning session Thursday (4/23) as market participants sought clarity over 
future U.S.-Iran truce talks that could ease the largest oil supply disruption 
in history as the closure of the Strait of Hormuz approached the eight-week 
mark.

   By 08:45 am ET, NYMEX WTI crude for June delivery was up $0.72 at $93.68 
bbl, while ICE Brent for June climbed $0.79 to $102.71 bbl.

   Downstream, NYMEX ULSD futures for May delivery retreated $0.0518 to $3.8861 
gallon, and front-month NYMEX RBOB futures rose $0.0171 to $3.3750 gallon.

   The US dollar index inched up 0.098 points to 98.51 against a basket of 
foreign currencies.

   Earlier this week, U.S. President Donald Trump extended indefinitely the 
ceasefire on Iran just hours before it was set to expire. Delegations from both 
countries have yet to meet for a second round of direct negotiations as the 
U.S. embargo on Iranian maritime trade continues. The lifting of the blockade 
on Iranian ports is one of Tehran's preconditions for any further negotiations. 
While Trump says talks may take place in Islamabad as soon as Friday, Iran has 
yet to state its willingness to meet.

   Oil flows out of the Persian Gulf, meanwhile, remained at a near standstill 
as Iran reinstated its own blockade on the Strait of Hormuz, which during 
normal times provided passage to some 20 million of petroleum liquids that make 
up a fifth of global supply.

   Prior to the U.S.  blockade on Iranian maritime trade, Iranian oil was with 
few exceptions the one undisrupted supply source from the Gulf. Iran also 
briefly allowed the Strait of Hormuz to be used by all vessels after Israel, 
the U.S. partner in the attacks on Iran, agreed to cease for ten days 
incursions into Lebanon in its war against Iran-aligned Hezbollah. That 
ceasefire also stands on shaky ground now.

   The Middle East disruption to 20% of global energy supplies has led to 
soaring demand for U.S. crude oil and refined products. The Energy Information 
Administration (EIA) on Wednesday reported that petroleum exports last week 
soared to a record-high 12.88 million bpd, propelled by an unprecedented 8.09 
million bpd in product exports.

   Over the past four weeks, total petroleum exports have averaged 12.19 
million bpd, 14% higher than in the same period last year. International demand 
for U.S. diesel, one of the fuels most affected by the current supply crisis, 
were over the last four weeks up more than 31% year-on-year.

   EIA data also showed that commercial inventories of gasoline and distillate 
fuel oil shrank by a combined 8 million bbl in the week ended April 17.




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