WTI Up 5th Straight Week on Iran, U.S. Storm Concerns


   
Barani Krishnan
DTN Refined Fuels Market Reporter

   SECAUCUS, NJ (DTN) -- Crude futures settled up on Friday (1/23) for a fifth 
consecutive week on renewed concerns of a potential U.S. strike on Iran and a 
weekend ice storm that could knock out power grids while boosting heating 
demand in the U.S. Southern Plains to Northeast.

   After a 2% drop Thursday (1/22) on reduced geopolitical tensions and U.S. 
oil inventory builds, crude prices jumped about 3% in the latest session as 
President Donald Trump warned that U.S. warships were headed for Iran, 
reigniting supply concerns in the event of a conflict in the world's largest 
oil producing region.

   "We have a massive fleet heading in that direction," the Associated Press 
quoted Trump as telling reporters aboard Air Force One on his return from the 
World Economic Forum in Switzerland, where he pledged to use diplomacy instead 
of force to boost the U.S. presence in Greenland.

   An outbreak of war in Iran could severely impact oil supplies from OPEC's 
fourth-largest oil producer with a steady output of approximately 3.2 million 
bpd. The Strait of Hormuz straddling Iran provides passage to roughly 20 
million bpd of crude oil and petroleum products transit equivalent to 20% of 
the world's total liquid fuel consumption and about of two-thirds of Middle 
East production led by Saudi Arabia, the U.S. Energy Information Administration 
says.

   On the weather front, concerns over U.S. heating demand and prices could 
become more pronounced with this weekend's Storm Fern, which has already driven 
spot natural gas to a one-year high of above $8 MMBtu, the Energy Information 
Administration cautioned.

   The front month natural gas futures contract on NYMEX settled at $5.275 
MMBtu on Friday, up 5% on the day and 43% on the year.

   The NYMEX WTI crude futures contract for March delivery settled up $1.71, or 
2.9%, at 61.07 bbl. The ICE Brent crude contract for March finished up $1.82, 
or 2.8%, at $65.88 bbl.

   Both WTI and Brent have gained about 8% each or more over the past five 
weeks on geopolitical tensions and near-term supply risks. This is despite the 
Paris-based International Energy Agency maintaining an oversupply prediction of 
3.7 million bpd for 2026 and the EIA reporting across-the-board increases in 
U.S. oil inventories last week, led by a 3.6 million bbl crude build.

   Downstream on Friday, NYMEX ULSD futures for February delivery rose by 
$0.0680 to $2.4348 gallon, while front-month RBOB climbed by $0.0334 to 0.0195 
to $1.8721 gallon.

   The U.S. Dollar Index declined by 0.686 points to 97.51 against a basket of 
currencies.




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