DTN Oil Update
Oil Futures Climb as Strait of Hormuz Risks Ease
HOUSTON (DTN) -- Oil futures rose Thursday after a four-day slide as traders assessed signs that the six-month Iran war may be easing supply risks with more vessels transiting the Strait of Hormuz, despite Washington's efforts to isolate the Iranian economy.
Negotiations between Iran and Oman to establish a joint shipping corridor in the Strait of Hormuz, which would ease the crude supply disruption, were reportedly in the final stages. Officials from both countries on Wednesday signaled optimism about opening a shipping lane within the next 30 to 60 days.
However, a global diesel supply crunch is adding upward pressure to ultra-low sulfur diesel (ULSD) futures contracts, with Russia, one of the biggest suppliers, facing domestic refinery outages and an export ban as intermittent Ukrainian attacks disrupt its refining system.
In the U.S., the ongoing global refined product supply shortage has drawn down diesel stockpiles to the lowest seasonal level on record last week, the Energy Information Administration reported Wednesday. Distillate inventories fell to 93.6 million bbl, down 11% year-on-year, and more than 15% below the five-year seasonal average.
The front-month ICE Brent futures contract showed the steepest price increase on the day, rising $2.17 bbl to $90.01 bbl, and the NYMEX WTI for October delivery increased $1.70 bbl to $83.93 bbl.
Downstream, NYMEX ULSD for September delivery rose $0.0151 to $4.2751 gallon, and front-month RBOB futures climbed $0.0655 to $3.3856 gallon.
The U.S. Dollar Index edged up 0.006 points to 99.095 against a basket of foreign currencies.
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