DTN Oil Update
Mixed Signals on Middle East Conflict Weigh Oil Prices
HOUSTON (DTN) --Oil crude futures dropped on Monday as market participants weighed mixed signals on the Middle East conflict, including reports of diplomatic efforts by senior officials from Saudi Araby, Pakistan and Turkey who met with Iran to seek peace, while U.S. President Donald Trump threatened to renew attacks on Iran.
According to media reports, the newly formed Mecca Alliance, comprising Saudi Arabia, Pakistani and Turkish, met with Iranian officials on Monday, with the parties agreeing to continue talks aimed at preventing further escalation of tensions in the Middle East.
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However, U.S. president Donald Trump on Sunday said that he was still deciding whether to pursue an agreement with Iran or take action to "finish them off."
The front-month ICE Brent dropped $1.90 to $115.947 barrels (bbl), while the NYMEX WTI futures contract for December delivery fell $1.44 to $101.82 bbl.
Downstream, ultra-low sulfur diesel (ULSD) futures reversed gains recorded in the morning, and the front-month NYMEX ULSD settled at $4.9120 gallon, down $0.0789 from Friday after hitting a session high of $5.0438.
In contrast, the NYMEX RBOB futures for December delivery increased $0.0369 to $3.2485 gallon.
The U.S. dollar index strengthened 0.187 points to 101.84 against a basket of foreign currencies.
This week, traders will closely monitor Federal Reserve Open Committee meeting scheduled for Oct. 28. The Federal Reserve raised U.S. interest rates by 25 basis points in September, bringing key U.S. lending rates to a 3.75%- 4% range.
It was the first monetary tightening in three years by the central bank, with analysts expecting it to hike rates further in the near term as it tries to combat rising inflation. The Fed's next rate decision will be in December.
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