Williams Watts and Isabel Wang, marketWatch
NEW YORK
EnergiesNet.com 04 02 2024
The benchmark U.S. oil futures contract ended above $85 a barrel for the first time since October on Tuesday — getting a lift after a strike a day earlier by Israel on Iran’s embassy in Syria stoked fears of a widening conflict in the Middle East, while oil supplies also faced renewed threats from Ukrainian attacks on Russian energy facilities.
Price moves
- West Texas Intermediate crude CL00, 0.25% for May delivery CL.1, 0.25% CLK24, 0.25% rose $1.44, or 1.7%, to end at $85.15 a barrel on the New York Mercantile Exchange. That was the highest settlement value for the U.S. benchmark since Oct. 27, according to Dow Jones Market Data.
- June Brent crude BRN00, 0.33% BRNM24, 0.33%, the global benchmark, was up $1.50, or 1.7%, to finish at $88.92 a barrel on ICE Futures Europe, the highest since Oct. 27, according to Dow Jones Market Data.
- Back on Nymex, May gasoline RBK24, 0.29% rose 4 cents, or 1.8%, to $2.7589 a gallon.
- May heating oil HOK24, 0.87% was up 8 cents, or 3.2%, at $2.7119 per gallon.
- May natural gas NGK24, 0.21% rose 2 cents, or 1.4%, to end at $1.8620 per million British thermal units.
Market drivers
The strike in Damascus killed two Iranian generals and five officers, according to Iranian officials, and appears to mark an escalation of Israel’s targeting of Iranian military officials. Tehran supports militant groups fighting Israel in Gaza, as well as along Israel’s border with Lebanon.
“This renewed tension comes at a time when oil fundamentals continue to firm thanks to the rollover of OPEC+ voluntary additional supply cuts,” said Ewa Manthey and Warren Patterson, strategists at ING, in a note.Nov. 2023’24657075808590$95
Since the start of the Israel-Hamas war in October, clashes between Israel and Iran-backed Hezbollah militants in Lebanon have increased. Hamas, which governs Gaza and launched the Oct. 7 attack on Israel that precipitated the war, is also a client of Iran. Houthi militants in Yemen, who have disrupted shipping routes in the Red Sea, are also backed by Iran.
The underlying tightness of supply in the oil market was already evident, the ING strategists said, with nearby WTI and Brent futures contracts trading at a growing premium to contracts for later delivery — a condition known as backwardation.
“The deficit environment through the second quarter should keep time spreads firm,” they wrote.
Also on Tuesday, Ukrainian drones struck Russia’s third-largest oil refinery, hitting a unit that processes about 155,000 barrels of crude per day — though an industry source said it had caused no critical damage, Reuters reported.
The Organization of the Petroleum Exporting Countries, or OPEC, is expected to hold an online meeting Wednesday of its Joint Ministerial Monitoring Committee. It’s expected to maintain support for current policy, which includes a continuation of 2.2 million barrels a day in production cuts by OPEC and its allies in the second quarter.
— Associated Press contributed.
marketwatch.com 04 02 2024
