Oil Up Anticipating Iran Hormuz Toll, Memorial Day Travel


   
Barani Krishnan
DTN Refined Fuels Market Reporter

   SECAUCUS, NJ (DTN) -- Oil prices steadied after a three-day decline to 
settle slightly higher Friday (5/22) as tensions swelled again in the Middle 
East from U.S. opposition to Iran's plans to toll the Strait of Hormuz.

   Record travel forecast across the United States for next week's Memorial Day 
holiday also boosted sentiment in futures trading of fuel.

   NYMEX WTI crude for July delivery settled up $0.25, or 0.3%, at $96.60 bbl, 
while ICE Brent for July finished higher by $0.96, or 1%, at $103.54 bbl.

   For the week, WTI fell 9% and Brent 5%, impacted by losses from Tuesday 
through Thursday when the market reacted to attempts by mediator Pakistan to 
secure a permanent peace deal between the U.S. and Iran and reopen Hormuz, 
blockaded by Tehran, to tankers carrying a fifth of world petroleum supply.

   Downstream, NYMEX ULSD futures for June delivery advanced by $0.0562 to 
close at $3.8878 gallon. June RBOB climbed $0.0743 to end at $3.4539.

   Fuel prices rose as the AAA forecast that a record 45 million people in the 
United States will travel between Thursday (5/21) and the Memorial Day holiday 
on Monday (5/25).

   After rising with few stops between March and April, energy markets have 
reversed course this month as the U.S. attempts to end the war with Iran which 
it began at end-February and restore shipping on the Hormuz.

   Tehran plans a toll of $2 million on each oil tanker crossing the strait, 
creating a major negotiation sticking point despite claims from United States 
officials that talks show some positive signs. Iran and Oman reportedly held 
discussions Friday on enforcing the toll, ignoring warnings from U.S. President 
Donald Trump that the international waterway must remain free.

   Iran also opposes handing over its enriched uranium to the U.S. or any other 
country chosen by the Trump administration, defying another core condition set 
by the White House for a permanent truce. Negotiations towards a deal have also 
been held up by Iran's demands that the U.S. lift its blockade on Iranian ports 
in order for any talks to begin.




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