WTI at $97 After Choppy Trade on Mideast Peace Prospects


   
Barani Krishnan
DTN Refined Fuels Market Reporter

   SECAUCUS, NJ (DTN) -- Oil markets saw choppy trade Thursday (4/9) on 
conflicting signals over peace prospects in the Middle East as Israel delivered 
mixed messaging on whether it would accede to Iran's demands to stop bombing 
Lebanon.

   U.S. President Donald Trump told a televised interview that Israel was 
scaling back its military operations in Lebanon. He said this was to maintain 
the ceasefire with Iran that the United States and Isarel had agreed to on 
Tuesday (4/7), after 40 days of fighting.

   "Netanyahu told me he'd low-key it," Trump said during an appearance on the 
NBC network, referring to Israeli Prime Benjamin Netanyahu's apparent 
willingness to scale back on Israeli attacks on Lebanon.

   But Netanyahu himself told Israeli media that his forces were "continuing to 
strike Hezbollah with force" to secure Israel's northern territory which 
borders Lebanon.

   Other news outlets cited Israeli Defense Forces as saying that they were 
bracing for Lebanese counterstrikes and, as such, did not want to let up on 
their bombing of Lebanon.

   Meanwhile, the Strait of Hormuz remained essentially closed, defying 
President Trump's demand for unrestrained passage on the waterway. As the 
Middle East's oil artery, the strait used to see crossings by as many as 140 
vessels a day, carrying a total of some 20 million bpd of petroleum liquids, 
aside from other commodities. Tehran's effective blockade of the Hormuz shortly 
after the start of U.S.-Israeli airstrikes on February 27 has reduced traffic 
there to a trickle.

   On Thursday, only three crossings were reported on the strait, comprising 
one vessel carrying dry goods and two Iranian-flagged tankers, one carrying 
bunker fuel and another fuel. That was after five ships that transited on 
Wednesday, all of them non-oil carriers. More than 800 ships were, meanwhile, 
reported stranded in the adjacent Persian Gulf.

   Iran has announced alternative routes for maritime traffic in the Persian 
Gulf, citing the risk of sea mines on the Hormuz. It is also demanding a toll 
of $1 for every bbl carried through the strait, adding further complications to 
Middle East oil transit and peace talks.

   Transit on the Hormuz, an international waterway, is "not a privilege to be 
granted, withheld or weaponized," UAE Minister of Industry Sultan Ahmed Al 
Jaber, who's also the CEO at Abu Dhabi National Oil Co, said in published 
remarks on Thursday.

   NYMEX WTI for May delivery settled up $3.46, or 3.7%, at $97.87 bbl after a 
session high of $102.70. It fell 16% on Wednesday (4/8), reacting to the 
ceasefire enforced the prior day.

   ICE Brent for June closed up $1.17, or 1.2%, at $95.92 bbl, after a session 
peak at $ 99.50. The front-month Brent contract fell 13% on Wednesday.

   Downstream, RBOB futures for May delivery softened by $0.0052 to $3.0007 
gallon, after trading as high as $3.1151 earlier. Front-month ULSD futures 
climbed by $0.1286 to $3.9370 gallon, after a session peak at $ 4.0989.

   The U.S. dollar index fell by 0.325 points to 98.600 against a basket of 
foreign currencies by 2:55 p.m. ET.

    




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