Oil Up 2% as U.S. Mulls Naval Reinforcement in Middle East


   
Barani Krishnan
DTN Refined Fuels Market Reporter

   SECAUCUS, NJ (DTN) -- Oil futures jumped about 2% Wednesday after U.S. 
President Donald Trump said he was weighing sending a second U.S. aircraft 
carrier strike group to the Middle East to prepare for military action if 
negotiations with Iran failed.

   Despite the American Petroleum Institute reporting a crude stockpile build 
of 13.4 million bbl for the week ended February 6 in a report issued Tuesday 
(2/10), the oil futures market remained bullish while market participants await 
U.S. Energy Information Administration's inventory report for last week, due at 
10:30 a.m. ET.

   President Trump has been pressuring Iran for weeks to succumb to U.S. 
demands that it completely dismantles its nuclear program and scale down its 
missiles capability.

   Iranian officials, in a meeting with their U.S. counterparts last week, were 
noncommittal to the demands, prompting Trump to reinforce his warning that U.S. 
warships positioned may strike at Tehran if it does not comply. The threats 
have sent oil prices soaring due to concerns about global supply-- Iran 
produces 3.2 million bpd --and the safety of oil passage in the adjoining 
Strait of Hormuz, which handles a fifth of world petroleum cargoes.

   This morning, the Organization of Petroleum Exporting Countries and its 
partners pledged to maintain a 1.4 million bpd growth forecast for world oil 
demand in 2026 in their monthly report for February, unchanged from last month.

   The OPEC+ group also maintained its forecast of 600,000 bpd for global 
production growth for this year.

   In the domestic economy, U.S. nonfarm employment report that nonfarm 
payrolls grew by130,000 in January -- double the level anticipated by 
forecasters and up from December's growth of 50,000 -- which also supported 
energy prices. An increase in U.S. jobs suggest an expanding economy and 
influences the Federal Reserve's monetary policy. 

   The NYMEX WTI futures contract for March delivery was up $1.72, or 2.7%, to 
$65.68 bbl. April ICE Brent surged by $1.75, or 2.5%, to $70.55 bbl.

   Downstream, March RBOB futures climbed by $0.0483 to $2.0075 gallon. The 
front-month ULSD futures contract rose by $0.0713 to $2.4701 gallon.

   The U.S. Dollar Index rose by 0.0185 points to 96.86 against a basket of 
currencies.
 

    




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