Correction: Fuel, Crude Rally as Supply Disruptions Deepen


   
Karim Bastati
DTN Analyst

   Correcting first paragraph to add reference to Iran

   VIENNA (DTN) -- Crude futures rose 2% and ULSD more than 5% Tuesday (3/17) 
morning as the supply disruption of Middle Eastern crude and oil products 
deepened amid new attacks launched by Iran on neighboring oil infrastructure.

   The United Arab Emirates were again forced to suspend loadings at the port 
of Fujairah after Iran struck an export terminal. As most tankers continued to 
avoid traversing the Strait of Hormuz, Middle Eastern crude production has been 
throttled by more than a third so far, with countries that depend on the 
Persian Gulf for exports like the UAE shutting more than half, and Iraq around 
three quarters, of oil production.

   Threats of Iranian attacks on tankers are keeping 20 million bpd of crude 
and product flows off the global market, although a handful of tankers from 
countries not hostile to Iran have started to traverse the chokepoint. Iraq's 
Oil Minister on Tuesday said he was in contact with the Iranian government to 
allow some Iraqi oil shipments through the Strait of Hormuz. Iranian oil 
exports, meanwhile, continued unabated.

   The U.S.-Israeli war on Iran looks set to drag on. U.S. President Donald 
Trump on Monday said the war will be "wrapped up soon, but not this week". 
Iranian officials, meanwhile, have in recent days repeatedly rejected ceasefire 
proposals, and have denied reports of recent direct contact with the U.S.

   The tightening fuel supply in Asia, meanwhile, is set to worsen as more 
countries curb oil product exports. Last week, China, the region's largest fuel 
supplier, banned exports until the end of the month. Some refiners in the 
region had to drastically reduce operations amid a shortage of crude deliveries 
from the Persian Gulf. Global middle distillate supply, in particular, 
tightened amid the sudden loss of 4 million bpd of flows from the Middle East, 
exports from Asia and refining cutbacks in the hundreds of thousands of bpd.

   Near 09:05am ET, NYMEX-traded ULSD futures for April delivery were up 
$0.1934, or 5%, to $4.0309 gallon, and ULSD for May delivery rose 5.75% to 
$3.7916 gallon. Front-month RBOB futures advanced $0.0710 to $3.0713 gallon.

   WTI for April delivery rose $1.36 to $94.86 bbl, and ICE Brent for May 
delivery added $1.76 to trade near $101.97 bbl.

   The US dollar index remained flat at 99.470 points against a basket of 
foreign currencies.




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