DTN Oil Update

Karim Bastati
DTN Refined Fuels Market Reporter

VIENNA (DTN) -- Oil prices were little changed Tuesday morning as market participants were awaiting the next step in negotiations between Washington and Tehran.

By 08:15 a.m. EDT, ICE Brent for August delivery was up $0.19 to trade near $73.34 barrel (bbl), and NYMEX WTI for August delivery rose $0.41 to $71.16 bbl.

Downstream, NYMEX ULSD futures for July delivery advanced $0.0263 to $3.3580 gallon on their last trading day and front-month RBOB futures edged higher $0.0035 to $3.0649 gallon. The more actively traded August contracts were up $0.0522 and $0.0112 gallon, respectively.

The U.S. Dollar Index strengthened by 0.278 points to 101.155 against a basket of foreign currencies.

Oil futures were on track for the third consecutive monthly decline as the risk premium tied to the U.S.-Israeli war on Iran and the ensuing supply disruption has seemingly all but disappeared. While the current ceasefire has largely held and exports from the Middle East have picked up the pace, a permanent settlement of the conflict has yet to be reached, keeping many shippers reluctant to send empty tankers back into the Persian Gulf.

Conflicting statements about potential future peace talks, meanwhile, kept the longer-term outlook murky. U.S. President Trump on Monday claimed U.S. and Iranian negotiators were -- at Tehran's request -- set to meet Tuesday in Qatar. Qatari and Iranian officials denied any direct talks taking place but said "technical meetings" would continue.

Crude oil prices having shed almost all of their war-time gains were not just a result of easing supply disruptions and heightened peace prospects. Oil flows from the Persian Gulf are still far from pre-war levels, but may be high enough to temporarily satisfy considerably weakened global demand. Refiners in Asia who were forced to slash runs amid the lack of crude availability are unlikely to immediately ramp up operations, but demand may receive a boost from the need to refill commercial and strategic inventories. Globally, oil inventories have in three months plummeted from five-year highs to the lowest in a decade.

Record high crude oil exports and releases from the Strategic Petroleum Reserve have also accelerated the seasonal draw in U.S. inventories, with commercial stockpiles falling to their lowest since January 2025. The American Petroleum Institute's weekly inventory estimate is scheduled for release later today, followed by U.S. Energy Information Administration data on Wednesday.