Brent for July settlement closed at $70.11 on the ICE Futures Europe exchange
Oil climbed for a second day as supply risks from the Middle East to the US Great Plains overwhelmed concerns that trade tensions will swamp energy demand.
Futures advanced 0.9% in New York on Tuesday. A jump in consumer confidence fuelled optimism among traders returning to work after crude logged the steepest weekly decline of 2019.
“A lot of guys looked at the washout we saw last week as an opportunity,” said Phil Streible, senior market strategist at RJO Futures Group Inc. in Chicago. “There was a lot of money on the sides with people who think oil is going to press back upwards.”
There was less enthusiasm about London-traded Brent futures, which flopped between gains and losses before ending the day unchanged near $70 a barrel. Flows on a key Russian pipeline resumed to central Europe on Monday after a contamination scare, while US President Donald Trump blunted some of his rhetoric against Iran.
West Texas Intermediate for July delivery rose 51 cents to $59.14 a barrel on the New York Mercantile Exchange. There was no settlement on Monday because of the Memorial Day holiday in the US
Brent for July settlement closed at $70.11 on the ICE Futures Europe exchange. The global benchmark was at an $10.97 premium to WTI, the widest in almost a year.
In the Middle East, a Saudi-led coalition claimed that it had foiled 35 terror attacks by Yemen’s Houthi rebels in the Bab al-Mandeb Strait between Yemen and Djibouti.
“We have evidence that Iran’s revolutionary guards provided Houthi rebels with the ballistic missile technology and drones,” Arab coalition spokesman Colonel Turki al-Maliki told reporters on Monday.
Flooding across the central US also posed potential disruptions to crude and refined products flows, said RJO’s Streible. Part of the Pony Express crude pipeline system to a key storage complex in Cushing, Oklahoma, was shut down last week. Meanwhile, Delek US Holding Inc. said Tuesday it doesn’t expect its Louisiana refinery to be affected by high waters on the Mississippi River.
The Ozark Pipeline, which moves crude oil from Cushing to the St. Louis area, has “essentially been shut” since mid-day on Friday, data provider Genscape Inc. said. It’s not immediately clear if it was related to the flooding, although the pipeline traverses both the Missouri and Mississippi rivers, Genscape said.