Oil Rebounds, Balancing Supply Risks with U.S. Crude Build


   
Barani Krishnan
DTN Refined Fuels Market Reporter

   SECAUCUS, NJ (DTN) -- Crude futures rebounded Friday (1/16) from the tumble 
of the prior session as traders remained wary of near-term risks even as U.S. 
inventory builds eased immediate concerns over supply.

   Oil markets have had a turbulent week, rising 9% over five sessions on 
concerns over the security of Iranian crude exports, before tumbling 4% just 
Thursday (1/15) alone. Despite the volatility, key crude benchmarks were still 
headed for a fourth straight week of gains.

   In morning trade, NYMEX WTI crude for February delivery was up by $0.62, or 
1%, to $59.81 bbl. The ICE Brent crude contract for March climbed by $0.71, or 
1.1%, to $64.47 bbl.

   For the week, WTI was on track to a 1.6% rise while Brent showed an advance 
of 1.8%.

   Among refined products, NYMEX ULSD futures for February delivery ticked up 
by $0.0324 to $2.2407 gallon, and front-month RBOB pushed higher by $0.0078 to 
$1.8181 gallon.

   The U.S. Dollar Index retreated by 0.082 points to 99.04 against a basket of 
foreign currencies, adding to the upside in crude and other commodities.

   This week's volatility in oil came following remarks by U.S. President 
Donald Trump after Wednesday's (1/14) market settlement that the "killing in 
Iran is stopping" and there were "no plan for executions" by the Islamic 
republic.

   Prior to that, large scale anti-government protests in Iran had sent the 
geopolitical risk premium soaring, raising questions about the security of oil 
supplies from OPEC's fourth largest producer with an output of 3.2 million bpd. 
The violent government crackdown on demonstrations had left thousands of people 
dead, according to human rights groups. Trump added to the tensions by 
encouraging Iranians to heighten their protests while warning the government in 
Tehran with airstrikes if it killed more people.

   Offsetting that bullish sentiment was weekly inventory data from the U.S. 
Energy Information Administration on Wednesday that showed higher inventories 
for both gasoline and crude. Gasoline stockpiles rose for a tenth straight week 
during the week ended January 9, gaining 9 million barrels. Crude inventories, 
meanwhile, rose for the first time in three weeks, climbing by 3.3 million bbl.




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