Oil Futures 6-Week Rally Stalls on Swings Over Iran


   
Barani Krishnan
DTN Refined Fuels Market Reporter

   SECAUCUS, NJ (DTN) -- Oil futures ended broadly higher Friday (2/6), 
reversing the previous day's tumble on continued volatility over risks related 
to Iran. However, on a weekly basis, crude futures posted their first loss 
after a six-week rally.

   Crude prices started the day lower on initial reports of an amicable 
beginning to U.S.-Iran talks in Oman that eased concerns over the security of 
Middle East oil supplies.

   But the market reversed direction after some reports said Tehran had refused 
to end its enrichment of nuclear fuel as demanded by U.S. officials. The 
Iranian position reignited fears of a U.S. reprisal, given President Donald 
Trump's repeated warnings to Tehran in recent weeks that he could resort to 
force if it did not comply with U.S. demands.

   Oil futures have been volatile this week, rising on news suggesting a 
potential escalation in U.S-Iran tensions but dropping on signs of diplomatic 
progress in the bilateral nuclear talks.

   The outcome of the Oman meeting and Trump's reactions are being closely 
monitored by oil traders as Iran produces 3.5 million bpd of crude, while its 
oil trade remains under U.S. and European Union sanctions. 

   Friday's market rebound was also supported by a second consecutive weekly 
draw in U.S. crude inventories reported by the Energy Information 
Administration this week.

   At the settlement, NYMEX WTI crude futures for March closed up $0.26, or 
0.4%, at $63.55 bbl. For the week, WTI fell 2.7%, after adding 16% over six 
prior weeks.

   April ICE Brent finished up $0.50, or 0.7%, at $68.05 bbl. Brent slid 4% on 
the week, after the previous six-week rally of 17%.

   Among refined products, March ULSD rose $0.0154 to $2.4086 gallon, while 
March RBOB futures advanced by $0.0211 to $1.9477 gallon.

   The U.S. Dollar Index slid by 0.206 points to 97.495, adding to Friday's 
rebound in crude and fuel prices.




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