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Crude oil futures closed little changed on Thursday as concerns about an expanding conflict in the Middle East faded as the market recaptured concerns about global oil demand that were reignited with this week’s report of a fourth consecutive weekly growth. in US crude oil stocks.
“The threat of an escalation of direct hostilities between Israel and Iran has been ignored by traders, although this should continue to put a lid on prices,” Trade Nation analyst David Morrison said. MarketWatch. “Instead, the focus is on renewed concerns about demand growth for the remainder of this year and beyond.”
But crude oil prices could still end the week higher, Sevens Report Research Co-editor Tyler Richey said that “the possibility of a devastating attack by Israel on Iran, potentially on their oil infrastructure, next weekend is too big a threat for traders to go home with short positions ” Friday.
Additionally, the Biden administration has reimposed sanctions on Venezuela but will allow some oil companies to continue operating in the country, easing a potential curb on supply.
Nymex Front-Month Crude (CL1:COM) for May deliveries is closed +0.1% to $82.73 a barrel, breaking a three-session losing streak, as June front-month Brent crude (CO1:COM) closed -0.2% at $87.11 a barrel, the lowest closing for Brent since March 27 for the second consecutive day.
The fall in U.S. diesel futures to the lowest since early January has reduced diesel’s crack spread – which measures refining profit margins – to its lowest level since last April.
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Iran is exporting more oil than ever in the past six years Financial Times reported Thursday, giving its economy a $35 billion-a-year boost even as the United States says it will tighten sanctions in response to the attack on Israel.
Iran sold an average of 1.56 million barrels a day during the first quarter, almost all of it to China, and the highest level since the third quarter of 2018, according to the report, which cited data firm Vortexa.
“The Iranians have mastered the art of circumventing sanctions,” said Fernando Ferreira of Rapidan Energy FT. “If the Biden administration really wants to make an impact, it needs to shift focus to China.”