Oil Mixed After 4-Yr WTI High as Trump's Iran Deadline Looms


   
Barani Krishnan
DTN Refined Fuels Market Reporter

   SECAUCUS, NJ (DTN) -- Crude futures were mixed on Tuesday (4/7) on reports 
that a senior U.N. envoy was traveling  to Tehran to pursue peace talks ahead 
of a U.S. deadline for Iran reopen the Strait of Hormuz or face the destruction 
of key infrastructure.

   The bid by Jean Arnault, the personal envoy to UN Secretary-General Antnio 
Guterres, was viewed as a last-ditch diplomatic effort by the world body to 
avoid further escalation to the Middle East conflict as a 8:00 p.m. ET deadline 
loomed for Iran to meet Trump's demand or face potential attacks targeting 
power plants and bridges.

   Trump has warned since Sunday (4/5) that the Hormuz, which carries a fifth 
of world petroleum cargoes, must be reopened if Iran and its population is to 
survive. "A whole civilization will die tonight, never to be brought back 
again," the president wrote on his Truth Social media platform on Tuesday. "I 
don't want that to happen, but it probably will."

   But Trump has also twice postponed his original ultimatum issued to Iran on 
March 21, leading to speculation that an off-ramp to further escalation was 
still possible before 8:00 p.m. ET on Tuesday.

   Iran remained defiant to the U.S. threat, with First Vice President is 
Mohammad Reza Aref saying that "the government is ready for all scenarios".

   Iranian media, meanwhile, published a counter warning that a number of 
bridges and roads in Saudi Arabia, UAE, and Bahrain will be regarded closed 
military zones from 11 pm Tehran time until further notice, and that residents 
and citizens should avoid those areas.

   Media reports out of Iran said its military will add the oil facilities of 
Aramco and Saudi Arabia's Yanbu and UAE's Fujairah pipeline to its targets if 
its power plants were hit

   "There are just so many moving pieces to this, including a last-minute 
ceasefire, and I think that's why the market has retraced its highs of the 
day," said a hedge fund manager in oil.

   As of 3:15 p.m. ET, the NYMEX WTI futures contract for May delivery rose 
$2.35 $112.95 to $114.76 bbl, after a four-year high at $116.56. In contrast, 
ICE Brent for June delivery dropped $0.64 to $109.20 bbl.

   WTI's premium against Brent, now above $5 bbl, is at its steepest in 18 
years. The spread between front-month May WTI and the immediate subsequent 
month, June, is at a record high above $15.5 bbl on near-term supply concerns 
and increased demand for U.S. crude amid the oil supply crisis.

   RBOB futures for May delivery rose by $0.0017 to $3.3099 gallon, while 
front-month ULSD futures climbed  $0.1366 to trade at $4.4650 gallon.

   The US dollar index fell by 0.149 points to 99.665 against a basket of 
foreign currencies.




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