DTN Oil Update
Oil Below $100 Bbl as U.S.-Iran Diplomacy Awaited at U.N.
SECAUCUS, NJ (DTN) -- Crude futures reversed a Tuesday rally that took Brent to above $100 bbl, settling down a fifth straight session after U.S. and Iranian officials held talks over the war in the Middle East, with U.S. President Donald Trump describing it as a meeting that went "very well".
Oil prices also came under pressure as algorithmic trading programs and commercial desks liquidated prompt long positions while rolling contracts ahead of the October NYMEX WTI expiration.
Speculation had swirled in recent days that Trump and Iranian President Masoud Pezeshkian could hold a summit meeting on the sidelines of the U.N. General Assembly in New York. The U.S. president addressed the assembly on Tuesday while his Iranian counterpart's speech is scheduled on Wednesday (9/23).
Both WTI and Brent traded beneath $100 bbl earlier on Tuesday, responding to a senior Iranian official's comment to media that the U.N. podium in New York presented a "golden opportunity" for the U.S. to lift its naval blockade on Iranian cargoes and for Tehran to reciprocate by reopening the Hormuz.
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There was no word on whether the two leaders hold face-to-face talks at the event, the first being attended by Pezeshkian on U.S. soil since the earnest start of the Middle East war in March. The meeting on Tuesday was conducted by high-level officials, including Trump's son-in-law Jared Kushner and special U.S. envoy Steve Witkoff.
"We will get it done and get it done fast," Trump told reporters when asked about the possibility of the White House reaching a deal to end the conflict with Iran. Earlier, in his speech to the U.S. assembly, Trump said he expected a deal with Iran soon after the U.S. midterm election on November 3.
NYMEX WTI crude for October delivery fell $1.19, or 1.24%, to settle at $94.59 bbl, after soaring to $97.42 during the session.
ICE Brent for November delivery moved down $1.09, or 1.09%, to settle at $99.25 bbl. The session high was $102.30.
Downstream, NYMEX ULSD for October delivery climbed $0.0388, or 0.82%, to finish at $4.9421 gallon. It peaked at $4.9578 for the day.
RBOB for October advanced $0.0203, or 0.57%, to end the session at $3.4875 gallon. It reached $3.5567 earlier.
By 3:19 p.m. EST, the U.S. dollar index gained 0.159 points to 100.315 against a basket of currencies.
Crude futures have lost more than $10 bbl over the past five sessions in anticipation that a prompt deal might end a war that has squeezed vessel movement on the Hormuz by more than 90% from pre-war levels. Tanker tracking services reported on Monday the passage of only two commodity-carrying vessels on the waterway, once transited by more than 100 ships per day carrying 20 million bpd of petroleum liquids.
Despite the market's focus on a potential breakthrough in the conflict, Bank of America raised this week its second-half Brent crude forecast, cautioning that prices could surge toward $150 bbl if Middle East hostilities escalate and transport bottlenecks persist. The bank emphasized that headline-driven relief rallies overlook critical structural deficits, as months of targeted infrastructure damage and vessel diversions have eroded spare operational capacity across major producing nations.
Physical transit risks continue to heighten regional supply fears. Red Sea skirmishes threaten the Bab el-Mandeb Strait, while a pipeline blockade has cut output at Libya's Sharara field from 340,000 bpd to roughly 127,000 bpd. Meanwhile, potential extension of Russia's diesel export ban into October keeps distillate markets tight.
Energy traders are also monitoring weekly supply metrics from the American Petroleum Institute, due at 4:30 p.m. EST, ahead of official inventory numbers from the Energy Information Administration on Wednesday. For the week ended September 11, the API cited a 7.1 million bbl crude build, compared to the EIA's reported draw of 600,000 bbl.
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