Oil Briefly Jumps After Israel and Iran Exchange Attacks


   
Karim Bastati
DTN Analyst

   VIENNA (DTN) -- Crude oil futures jumped more than 5% in early morning trade 
on Monday (6/8) after Israel and Iran exchanged missile attacks for the first 
time since a ceasefire was declared in early April. The really eased after U.S. 
President Donald Trump called on Israel to exercise constraint and said that 
both sides were looking to immediately reestablish a ceasefire.

   By 08:15am ET, ICE Brent for August delivery was up $1.62 to trade near 
$94.71 bbl, and NYMEX WTI for July delivery rose $1.38 to $91.92 bbl.

   Downstream, NYMEX ULSD futures for July delivery climbed $0.0727 to $3.6601 
gallon, and front-month NYMEX RBOB futures advanced $0.0553 to $3.1012 gallon. 

   The US dollar index softened by 0.16 points to 99.89 against a basket of 
foreign currencies.

   Israel has over the past weeks stepped up its attacks on Lebanon, raising 
doubts over an imminent U.S.-Iranian peace deal as the cessation of the Israeli 
campaign against Hezbollah and incursion into Lebanese territory remained one 
of Tehran's central preconditions for further talks. Iran on Sunday launched 
missiles toward Israel after strikes on strongholds of the Iran-aligned militia 
in Beirut. Israel in response struck a petrochemical plant in Iran overnight.

   Oil prices jumped in reaction to the most serious flareup of hostilities of 
the last two months, but softened after Trump on Monday called on both sides to 
cease attacks and in a social media post claimed that "Israel and Iran are 
looking to do an immediate CEASEFIRE"! The Iranian military declaring an end to 
attacks on Israel also weighed on prices which pared most of earlier gains, but 
remained up on the day.

   Despite the unilaterally declared detente, several hurdles remained in place 
on the road to a permanent settlement of the conflict, including Tehran's 
demand for transit fees in the Strait of Hormuz and the ongoing U.S. blockade 
of Iranian maritime trade, which president Trump on Monday said will remain in 
place "until a "Final Deal" is reached".




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