DTN Oil Update
WTI Dips Nearly 5% as Trump Cancels Strikes on Iran
HOUSTON (DTN) -- Oil futures prices retreated Thursday, dropping by nearly 5% after U.S. President Donald Trump canceled scheduled strikes on Iran and suggested a deal is close.
The NYMEX WTI crude futures contract for July delivery fell $4.03 to $86.00 barrel (bbl) after a session high at $93.64. ICE Brent for August shipments dropped $4.39 to $88.71 bbl after peaking at $ 95.50.
July NYMEX ULSD slipped by $0.1511 to $3.4615 gallon, while the front-month RBOB futures contract retreated by $0.0521 to $3.0578 gallon.
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The U.S. Dollar Index dropped 0.319 points to 99.615 against a basket of foreign currencies.
In a post on Truth Social, Trump said talks with Iran "have been brought to the highest Iranian level and approved."
Following Trump's statement, a bearish sentiment dominated the oil futures market, erasing part of Wednesday's gains. Crude oil benchmarks rallied on Wednesday after the U.S. Energy Information Administration reported a seventh consecutive weekly draw in domestic crude inventories.
U.S. commercial crude oil inventories fell by 7.2 million bbl to 426.5 million bbl during the week ended June 5, the lowest commercial crude oil inventory level since the week ended Feb. 13, 2026, when stocks stood at 419.8 million bbl.
Distillate fuel inventories declined by 200,000 bbl to 102.1 million bbl during the reference week after rebounding the prior week. In contrast, total motor gasoline stocks increased by 200,000 bbl to 215.1 million bbl during the reference week.
Separately, the World Bank said in its latest Global Economic Prospects report that the conflict in the Middle East is expected to slow global economic growth to its weakest pace since the COVID-19 pandemic, as higher energy costs fuel inflation and keep borrowing costs elevated.
The World Bank lowered its forecast for global growth to 2.5% in 2026 from 2.9% in 2025, citing weaker outlooks across roughly two-thirds of economies. The report assumes disruptions tied to the closure of the Strait of Hormuz begin easing later this year but warns energy markets remain vulnerable.
Brent crude oil is projected to average $94 bbl in 2026, up 36% from 2025 under the report's baseline scenario.
Global inflation is expected to rise to 4.0% this year from 3.3% in 2025, while developing economies are forecast to post their weakest growth rate since the pandemic recovery period.