DTN Oil Update
Oil Dips on Profit-Taking, Contract Roll Activity
SECAUCUS, N.J. (DTN) -- Crude and refined product futures fell Thursday as market participants managed front-month contract expiration pressures while engaging in profit-taking following the prior session's large gains.
Despite a bullish crude drawdown of 7.2 million bbl reported by the U.S. Energy Information Administration on Wednesday for the week ended July 24, energy futures yielded to technical selling pressure amid diplomatic efforts to resolve the U.S.-Iran standoff over the Strait of Hormuz.
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Selling was further amplified by roll activity and options pinning as the front-month August refined product and Brent contracts approach month-end expiration.
NYMEX WTI for September delivery settled down $0.87, or 1%, at $83.59 bbl, after rising almost 7% on Wednesday. ICE Brent for September delivery closed down $1.71, or 1.9%, at 89.03 bbl, following the prior sessions 8% gain that drove it above $90 bbl.
Downstream, fuel derivatives on NYMEX faced steeper percentage declines ahead contract expiration Thursday.
In diesel, August NYMEX ULSD eased $0.1607 to $ 4.2094 gallon, while the more-actively traded September contract dropped $0.1066 to $ 4.1291 gallon.
In gasoline, August NYMEX RBOB eased $0.6933 to $ 3.2847 gallon, while September RBOB slid $0.0945 to $ 3.1313 gallon.
The downside in prices was, however, limited by shipping data showing severely depressed tanker traffic on the Strait of Hormuz. An Iranian drone strike on an LNG tanker in the Red Sea heightened security risks for alternative trade routes.
Away from the Middle East, Kazakh crude exports via the Black Sea port of Novorossiysk were halted too, following Ukrainian attacks on tankers that lift crude from a pipeline terminal moving 1.2 to 1.4 million bpd to international markets.