Brent crude oil for June delivery jumped by more than $2/bbl to settle above $71/bbl on Apr. 10. It was the front-month’s highest closing price since December 2014, which analysts attributed to rising tensions about a possible military strike against Syria and a weakening US dollar.
Meanwhile, the US light, sweet crude benchmark contract on the New York futures market gained more than $2/bbl to close at its highest level since Mar. 26.
“It’s very much about news headlines from the Middle East,” said Eugen Weinberg, Commerzbank analyst.
Talk of a military strike to Syria raises the prospect of oil supply disruptions across the Middle East, Weinberg said, noting that Syria itself is not a major oil producer. The US and France have warships armed with cruise missiles positioned within firing range of Syria. US officials are seeking international support for a strike.
On Apr. 11, US President Donald Trump said US missiles “will be coming” to Syria and warned Russia that he was willing to launch a military strike against Syrian President Bashar al-Assad over an alleged chemical-weapons attack.
Separately, the US dollar fell in value against other currencies after the European Central Bank indicated plans to end ECB bond purchases this year.
The Wall Street Journal Dollar Index, which measures the currency against a basket of 16 others, slipped 0.1% to 83.72. The dollar fell 0.3% vs. the euro, WSJ said. Oil is traded in US dollars, so a weakening dollar makes oil less expensive for buyers starting with other currencies.
Traders and analysts also awaited news on US oil supply levels. The Energy Information Administration is scheduled on Apr. 11 to release its weekly inventory on crude oil and products for the week ended Apr. 6.
The American Petroleum Institute already issued its own preliminary estimate, saying US crude inventory gained 1.8 million bbl for the week ended Apr. 6.
Energy prices
The May light, sweet crude contract on the NYMEX climbed $2.08 on Apr. 10 to settle at $65.51/bbl. The June contract rose $2.01 to $65.44/bbl.
The NYMEX natural gas price for May dropped nearly 4¢ to a rounded $2.65/MMbtu. The Henry Hub cash gas price on Apr. 10 fell 2¢ to $2.69/MMbtu.
Ultralow-sulfur diesel for May rose 6¢ to $2.06/gal. The NYMEX reformulated gasoline blendstock for May settled up nearly 6¢ to a rounded $2.04/gal.
Brent crude oil for June increased $2.39 to $71.04/bbl on London’s International Commodity Exchange. The July contract climbed $2.24 to $70.42/bbl. The gas oil contract for April was $627.75/tonne, up $14.50.
The Organization of Petroleum Exporting Countries basket of crudes averaged $66.96/bbl on Apr. 10, up $1.87.
Contact Paula Dittrick at [email protected].
