Oil Dips, Products Rise as Iranian Supply Fears Ease


   
Karim Bastati
DTN Analyst

   VIENNA (DTN) -- Crude oil futures edged lower Monday (1/12) morning, and oil 
product futures rose, after a violent quelling of protests in Iran over the 
weekend eased perceived supply risks.

   WTI futures for February delivery fell $0.13 to $58.84 bbl, and ICE Brent 
for March delivery softened by $0.19 to $63.15.

   Downstream, NYMEX ULSD futures for February delivery rose $0.0060 to $2.1410 
gallon, while front-month RBOB futures advanced by $0.0049  $1.7825 gallon.

   The U.S. Dollar Index softened by 0.385 points to 98.50 against a basket of 
foreign currencies.

   The Iranian government on Monday claimed the situation is "under total 
control" a violent crackdown led to hundreds of deaths over the weekend. The 
largest protests in years have raised concerns about crude oil supply from the 
country producing some 3.2 million bpd. U.S. President Donald Trump has 
threatened military intervention should the Iranian government step up its 
violence against protesters. Trump told reporters on Sunday that Iran "want to 
negotiate" with the U.S. Iran's Foreign Minister Abbas Araghchi said the 
country was "ready for war and also ready for dialogue."

   Trump also said on Friday that U.S. companies were ready to invest $100 
billion into reviving Venezuela's oil industry. A White House meeting with oil 
company executives, however, revealed that many remained reluctant to invest in 
an oil play with relatively high break-evens and poor and uncertain security 
standards. Exxon Mobil's CEO called Venezuela "uninventable".

   The International Energy Agency (IEA) has warned that last year's surplus in 
crude could double to 3.8 million bpd this year, prompting market participants 
to closely watch potential disruptions to Iranian supply and a possible 
increase in Venezuelan output.

   The U.S. Energy Information Administration's (EIA) monthly short-term energy 
outlook is scheduled for release Tuesday (1/13), followed by the Organization 
of the Petroleum Exporting Countries' monthly oil market report on Wednesday. 
The IEA is set to release its newest monthly outlook next week.

   The American Petroleum Institute (API) and the EIA are also scheduled to 
release inventory data for the week ended January 9 in U.S. crude, gasoline and 
distillates on Tuesday and Wednesday, respectively. For the prior week to 
January 2, the API reported that U.S. commercial crude oil stocks fell by 2.8 
million bbl while the EIA cited a decline of 3.8 million bbl.




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