DTN Oil Update
Oil Futures Extend Gains on Trade Optimism, US Confidence
DAVENPORT, Fla. (DTN) -- Oil futures continued their rally Tuesday, supported by persistent optimism around improving global economic conditions. Momentum was fueled by the recent U.S.-EU trade agreement, reports that China and the U.S. will extend their tariff pause by another 90 days following talks in Sweden, and President Donald Trump's move to accelerate the timeline for a ceasefire deal in Ukraine, further reinforced by encouraging U.S. economic data released earlier in the day.
In economic data, the U.S. trade deficit in goods dropped 11% to $86 billion in June, a 22-month low, as U.S. businesses adjusted to shifting tariff policies. U.S. consumer confidence also edged up in July, with the Conference Board's index rising 2.0 points to 97.2, while expectations for income and labor conditions showed improvement.
NYMEX September West Texas Intermediate futures advanced $2.50 to $69.21 bbl, settling at their highest level since June 23, while ICE September Brent futures gained $2.28 to $72.51 bbl, the highest since June 20. September ULSD futures rose $0.0372 to $2.4638 gallon, and RBOB futures settled $0.0832 higher at $2.2184 gallon. The U.S. Dollar Index strengthened 0.20 points to 98.595.
Crack spreads were mixed, with the ULSD crack falling $0.80 to $34.40 bbl and the gasoline crack rising $0.62 to $27.65 bbl. Backwardation strengthened across products, with the WTI front-month premium widening $0.10 to $0.90, and RBOB backwardation firming $0.014 to $0.014.
Market participants now turn their attention to weekly inventory data from the American Petroleum Institute, due out at 4 p.m. EDT, followed by the Federal Reserve's interest rate decision expected Wednesday at 2 p.m. EDT.
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