Oil Begins April Lower as Trump Signals End to Iran War


   
Barani Krishnan
DTN Refined Fuels Market Reporter

   SECAUCUS, NJ (DTN) -- Energy prices fell broadly Wednesday (4/1) although 
crude stayed above $100 bbl as market participants awaited U.S. President 
Donald Trump's announcement on when the Iran war will end, following the White 
House's scheduling of an update later in the day on the month-long conflict.

   Trump is to speak at 9.00 p.m. ET on Wednesday to give "operational updates 
and tout success in achieving the goals in Iran", a White House official was 
cited saying by media reports. Trump was, meanwhile, reported to have briefed 
Saudi Crown Prince Mohammed bin Salman Wednesday on the possibility of a 
ceasefire.

   The White House update also follows remarks by Prime Minister Benjamin 
Netanyahu on Tuesday (3/31) that he believed Iran no longer posed an 
existential thread to Israel, his first such observation in years.

   Trump has floated talk of a ceasefire since last week as the U.S.-Israeli 
airstrikes on Iran that began on February 27 neared its first full month. On 
Wednesday, he wrote on his social media that Iran had requested a ceasefire, an 
announcement swiftly denied by Tehran.

   Iran has said that regardless of how the war progresses or ends, it will 
control the flow of tankers on the Strait of Hormuz, which it blockaded soon 
after the outbreak of fighting. The narrow waterway, adjacent to the Persian 
Gulf and bordered by Iran and Oman, used to be a transit point for 20 million 
bpd of petroleum liquids, mostly of Middle East origin. Iran has only allowed 
about 10% of that through, granting access to non-U.S.-Israel allies. It has 
also fired missiles over the last month at oil and gas facilities and crude 
tankers in neighboring countries, further impeding global supply and sending 
prices higher.

   Trump had initially threatened attacks on Iranian oil infrastructure and 
power plants if the Hormuz was not reopened. But on Wednesday he said that was 
no longer a U.S. problem, telling countries short on jet fuel to buy from the 
U.S., which he said had plentiful supply.

   Despite signs of a quick de-escalation to the Middle East situation, 
analysts said it may take a while to bring energy prices back to pre-war 
levels. Brent rose a record 94% in the first quarter while ULSD surged 101%.

   By 1:35 p.m. ET on Wednesday, NYMEX WTI crude futures contract for May 
delivery was down $1.05, or 1%, to $100.33 bbl. WTI was pressured partly by 
weekly inventory data from the Energy Information Administration (EIA), showing 
U.S. crude stocks rose a sixth consecutive week, climbing 5.5 million bbl to 
461.7 million.   ICE Brent futures contract for June delivery slid $2.42, or 
2.33%, to $101.55.

   NYMEX RBOB futures for May delivery slipped by $0.1072 to $3.0967 gallon, 
while front-month ULSD futures slid $0.0434 to $4.0704 gallon.

   The EIA said gasoline stocks fell by 500,000 bbl to 240 million and 
distillate balances slid by 2.1 million to 117.8 million. Jet fuel inventories 
eased by 300,000 bbl to 44 million bbl.

   The US dollar index moved down 0.324 points to 99.435 against a basket of 
foreign currencies.




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