Oil Retreats after Overnight Spike following IDF Attack
4/19 6:37 AM
Oil Retreats after Overnight Spike following IDF Attack
VIENNA (DTN) -- West Texas Intermediate futures closest to expiration on the
New York Mercantile Exchange and Brent crude on the Intercontinental Exchange
retreated Friday morning after surging more than $3 bbl overnight following
reports of an Israeli strike on Iranian soil.
Brent crude for June delivery rocketed to $90.75 bbl after drone attacks and
explosions were reported in Isfahan. With the market still waiting for an
official Iranian response, prices returned most of the overnight gains in early
trading.
The bullish development came as oil futures reverted to levels just before
the Israeli April 1 attack in Damascus that killed two Iranian generals. The
shrinking geopolitical risk premium against a backdrop of economic
uncertainties defined much of the price action this week.
China's gross domestic product growth rate in the first quarter surprised on
the upside, with the National Bureau of Statistics on Monday reporting a 5.3%
year-on-year increase. Investments and retail sales, however, disappointed.
Retail sales in the United States, meanwhile, in March grew 0.7%
month-on-month, according to the Bureau of Labor Statistics. The
hotter-than-expected reading on Monday pushed back prospects of an early rate
cut.
This week's U.S. inventory report also weighed on prices, with the Energy
Information Administration on Wednesday reporting commercial crude oil
inventories in the U.S. increased 2.7 million bbl in the week ending April 12.
Despite the combined 4.7 million bbl draw to gasoline and distillate
inventories, total commercial petroleum stocks surged 10 million bbl last week,
as builds to crude and a 1 million bbl build to jet fuel stocks came alongside
a 7.5 million bbl surge in "other oils" stocks.
Near 7:30 AM ET, WTI futures for May delivery were down $0.80 to trade near
$81.93 bbl, and Brent for June delivery fell $0.84 to $86.27 bbl. RBOB for May
delivery dropped $0.0289 to $2.68489 gallon, while ULSD for May delivery traded
near $2.5190 gallon, down $0.0150.
Karim Bastati, karim.bastati@dtn.com, www.dtn.com
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