Oil Prices Back at 7-Mo High as Middle East Tensions Spike


   
Karim Bastati
DTN Analyst

   VIENNA (DTN) -- Oil and product prices regained their upward momentum Friday 
(2/27) as limited progress in U.S.-Iran nuclear talks and evacuations by 
Washington of diplomatic staff and their families in the Middle East raised 
expectations of an imminent military strike on Tehran.

   The market pivot, which took crude futures back to seven-month highs after 
an ease in geopolitical tensions in recent days, came as multiple outlets 
reported that U.S. President Donald Trump was set to convene with senior 
advisors later in the day to discuss the potential of limited strikes on 
Iranian military and nuclear facilities.

   Reactions to the latest round of the nuclear talks in Geneva on Thursday 
were mostly positive even as U.S. envoys Jared Kushner and Steve Witkoff 
initially said they were "disappointed" after the first half of the 
negotiations. Iranian foreign minister Abbas Araghchi claimed "good progress" 
in the talks, which he said focused on sanctions relief and Iran's nuclear 
program. The parties agreed to meet in Vienna next week to continue 
negotiations.

   Despite the ongoing diplomatic effort, the risk of a U.S. strike on Iran 
remained elevated as Trump's "10 to 15 day" deadline from last week for Iran to 
reach a deal with White House-appointed negotiators inched closer.

   Washington, meanwhile, continued to pull diplomatic and military personnel 
from areas within striking range of Iran and its proxies, as U.S. forces 
amassed the largest military presence in the Middle East since the invasion of 
Iraq in 2003.

   The U.S also called on its citizens to leave Israel. Separately, China 
issued on Friday a travel alert for Iran, urging Chinese citizens to leave the 
country as soon as possible.

   NYMEX WTI crude futures for April delivery were up $2.36 at $67.57 bbl. The 
session peak of $67.83 was the highest since August 1, when it reached $69.58.

   ICE Brent crude for April delivery rose $2.19 to $72.94 bbl after an 
intraday peak of $73, the highest since July 31, when it reached $73.53.

   Downstream, front-month RBOB futures climbed $0.0535 to $2.0858 gallon, 
while ULSD futures advanced by $0.0925 to $2.7050 gallon.

   The U.S. dollar index slipped by 0.055 points to 97.685 against a basket of 
foreign currencies.




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