Oil Rebounds on Iran's Threat to Abandon Ceasefire


   
Barani Krishnan
DTN Refined Fuels Market Reporter

   SECAUCUS, NJ (DTN) -- Crude and product futures rebounded Thursday (4/9) 
from the selloff of the previous session as tensions flared again in the Middle 
East from Iran's threat to abandon a ceasefire with the U.S. and Israel if its 
ally Lebanon remains under attack.

   On Wednesday (4/8), the Israeli military executed its most intensive strikes 
on Lebanon since the start of the Iran war on February 27, hitting over 100 
targets across Beirut, the Bekaa Valley and southern Lebanon.

   "Israeli strikes on Lebanon violate the ceasefire agreement," Iran's 
President Masoud Pezeshkian said.  "Attacks on Lebanon would deem ceasefire 
negotiations meaningless. Iran will not abandon the Lebanese people."

   Israel and the U.S. say Lebanon was not part of the two-week ceasefire deal 
with Iran.

   Mohammad Eslami, head of the Atomic Energy Organization of Iran also said 
Tehran viewed its "right to enrich uranium" as a non-negotiable component of 
any long-term peace deal. This adds a layer of complexity to peace talks 
scheduled in Pakistan at the weekend, as both Israel and the U.S. forbid Iran 
from nuclear development initiatives.

   Attention was also on the Strait of Hormuz, the Middle East's oil shipment 
artery where tanker transit remained at a virtual standstill despite U.S. 
demands that Iran reopen the waterway under the two-week ceasefire agreement.

   Only one oil products tanker and five dry bulk carriers were reported to 
have traversed the strait in the last 24 hours, compared to the typical average 
of 140 vessels daily carrying a total of some 20 million bpd of petroleum 
liquids.

   Iran announced alternative routes for maritime traffic in the Persian Gulf, 
citing the risk of sea mines on the Hormuz, which it has effectively blockaded 
through most of the 40-day conflict in the region. Reports cited Iranian 
officials as demanding a toll of $1 for every bbl carried through the Hormuz, 
sparking protests from the Trump administration and adding to the upward 
pressure on oil prices in Thursday's session.

   By 8:45 a.m. ET, the NYMEX WTI futures contract for May delivery was up 
$5.20, or 5.5%, to $99.61 bbl after a 16% decline in the prior session.

   ICE Brent for June rose $3.72, or 4%, to $98.47 bbl, after settling down 13% 
Wednesday.

   Downstream, RBOB futures for May delivery advanced by $0.0606 to $ 3.0665 
gallon while

   front-month ULSD futures climbed by $0.2022 to $4.0106 gallon.

   The US dollar index fell by 0.220 points to 98.705 against a basket of 
foreign currencies.

    




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