WTI Surges Over $100 as Iran Ceasefire Fails


   
Maria Eugenia Garcia
DTN Energy Editor

   HOUSTON, TX (DTN) -- Oil futures continued their upward trend Tuesday 
(5/12), with global crude benchmarks WTI and Brent climbing over the $100 mark 
after negotiations between the United States and Iran have stalled, while the 
blockade at the Strait of Hormuz heightened concerns about limited supplies.

   Expectations of tighter inventories also contributed to setting a bullish 
tone in the oil futures market. Last week the Energy Information Administration 
data showed U.S. commercial crude oil inventories declined for a second 
straight week while distillate fuel inventories dropped to their lowest level 
in two decades.

   The front-month NYMEX WTI futures contract climbed $3.52 to $101.59 bbl, 
while the July ICE Brent futures contract increased $3.37 to $107.94 bbl.

   Refined products also moved higher, with June RBOB gasoline futures advanced 
$0.1031 to $3.7029 gallon, the front-month ULSD contract increased $0.1335 to 
$4.1022 gallon.

   The U.S. dollar index rose 0.406 points to 98.23 against a basket of 
currencies. 

   Diplomatic efforts remained strained after negotiations between the United 
States and Iran to end the war failed again with both sides continuing to 
reject each other's proposals.  President Donald Trum dismissed Tehran's latest 
peace proposal as "garbage" and said that the prospects for a ceasefire were 
"on life support." Meanwhile, Iranian officials declared that the country was 
prepared to "teach a lesson" if attacked by the U.S.  

   Separately,  the Bureau of Labor Statistics reported Tuesday U.S. headline 
inflation hit a three-year high in April as the Consumer Price Index  rose 3.8% 
year-on-year, driven by a persistent surge in energy costs linked to the Middle 
East conflict.

   The reading surpassed market expectations for a 3.7% yearly increase and 
marked a significant jump from the annual 3.3% rate recorded in March.




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