Oil Steady as Middle East Jitters Offset U.S. Crude Build


   
Barani Krishnan
DTN Refined Fuels Market Reporter

   SECAUCUS, NJ (DTN) -- Oil and product futures closed little changed 
Wednesday (2/25) as fears of military action against major OPEC member Iran 
offset a massive build in weekly crude inventories reported by the U.S. Energy 
Information Administration (EIA).

   Crude prices remained near seven-month highs as Iranian Foreign Minister 
Abbas Araqchi's team departed for talks in Geneva on Thursday (2/26) with White 
House negotiators determined to pressure Tehran into dismantling its nuclear 
program.

   Analysts noted that it may be Iran's final diplomatic opportunity to avert 
military action from the U.S., which has assembled two aircraft carriers, 150 
fighter jets and some 1,200 missiles in Middle East waters. Iran is both OPEC's 
fourth largest producer and exporter.

   "Where market attention is concerned, geopolitical tensions over Iran are 
clearly winning over U.S. inventories," a hedge fund manager in oil told DTN.

   The EIA said U.S. commercial crude oil stocks jumped by 16 million bbl last 
week to 435.8 million, accounting for the largest weekly increase in three 
years.

   Crude inventories have been volatile over the past month amid snowstorms in 
the U.S. Midwest to Northeast that hit production in the Permian Basin and 
other oil producing patches.

   Last week's crude build was accompanied by a 900,000 bbl stockpile growth at 
the Cushing, Oklahoma delivery point for NYMEX West Texas Intermediate futures.

   In product inventory, gasoline fell by 1.0 million bbl to 254.8 million for 
the week ended February 20, while distillate fuel oil balances retreated by 
300,000 bbl to 120.4 million.

   At Wednesday's settlement, NYMEX WTI for April delivery slipped by $0.21 to 
$65.42 bbl, while the front-month ICE Brent futures contract advanced by $0.08 
to $70.85 bbl.

   Downstream, RBOB futures for March settled up $0.0200 at $1.9914. ULSD 
front-month contract finished down $0.0129 at $2.6740 gallon.

   The U.S. Dollar Index edged down 0.125 points to 97.645 against a basket of 
currencies.




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