Brent Back Above $100 as U.S. Plans More Troops for Iran


   
Barani Krishnan
DTN Refined Fuels Market Reporter

   SECAUCUS, NJ (DTN) -- Oil prices resumed their rally Tuesday (3/24) after a 
one-day reprieve as the U.S. was reported to be planning to send thousands of 
additional troops to the Middle East, and Iran denied that it was in talks to 
protect its power plants from U.S.-Israel fire.

   North Sea Brent crude returned to above $100 bbl and U.S. West Texas 
Intermediate moved upwards of $90 bbl as ballistic missiles were traded across 
Middle East skies, with Iran striking Tel Aviv and Israel targeting Tehran, and 
Beirut -- Iran's long-time ally in any war with the West.

   The conflict could escalate further if the U.S. authorizes a new combat team 
of 3,000 soldiers for the Middle East, media reports said.

   The Strait of Hormuz, the waterway for most of the Middle East's oil and a 
fifth of world petroleum cargo, meanwhile, remained effectively closed. Iran 
has turned the strait into a controlled corridor, allowing select vessels from 
China, India and Pakistan to pass.

   Major OPEC producers in the region, from Kuwait to the UAE and Qatar, have 
been forced to cut refining runs as product storage tanks hit capacity with no 
export outlet, reportedly leaving more than 4.0 million bpd at risk.

   Despite growing hostilities, the U.S. and a group of regional mediators were 
still open to holding high-level peace talks with Iran as soon as Thursday, 
some reports said.

   U.S. President Donald Trump announced Monday (3/23) a five-day pause on 
strikes planned on Iran energy infrastructure, saying he hoped for a diplomatic 
resolution.

   But Iran has repeatedly denied engaging with White House-appointed 
negotiators or pursuing any talks to protect its power plants from U.S.-Israel 
attacks.

   "As of this morning, there is no framework, no draft, no signed anything," 
Phil Davis, founder of PSW Investments in Boynton Beach, Florida, wrote in a 
note, explaining why "the Monday oil crash has already been more than half 
erased."

   At Tuesday's close, NYMEX WTI futures for May delivery settled up $4.22, or 
nearly 5%, at 92.35 bbl. It tumbled 10% in the prior session.

   The ICE Brent contract for May closed up $4.55, or 4.6%, at $104.49 bbl 
after Monday's 11% slide.

   Downstream, NYMEX ULSD futures for April delivery finished up $0.2349 at 
$4.2909 gallon. The NYMEX RBOB gasoline contract for April ended up $0.1731 at 
$3.1480 gallon.

   The U.S. dollar index strengthened 0.480 points to 99.205 against a basket 
of foreign currencies.




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