Oil Lower in Early Trade

CRANBURY, N.J. (DTN) -- Oil futures nearest to delivery traded on the New York Mercantile Exchange (NYMEX) and Brent crude on the Intercontinental Exchange moved lower in early trading Tuesday, with West Texas Intermediate (WTI), Brent and RBOB futures consolidating within Monday's trade range while the ULSD contract slips to a four-day low following the May contract expiration at Monday's close.

The pullback follows rallies to fresh multiyear highs for Brent and ULSD and to an eight-month high by RBOB Monday in response to an Israeli presentation showing Iranian documents detailing Tehran's ongoing nuclear weapons program.

The 20-minute afternoon presentation by Israeli Prime Minister Benjamin Netanyahu showed thousands of documents smuggled out of Iran that detail Tehran's ongoing efforts to develop nuclear weapons in violation of the Iranian nuclear accord reached with the five permanent members of the United Nations Security Council and Germany in 2015.

Oil futures surged on the news, which comes ahead of a May 12 deadline set by U.S. President Donald Trump for major changes to be made to the agreement in order to maintain the United States as part of the accord.

"This information provides new and compelling details about Iran's efforts to develop missile-deliverable nuclear weapons," read a statement from the White House Press Secretary issued Monday evening.

However, Netanyahu's presentation is not expected to change much, with the United States already expected to withdraw from the agreement while European allies attempt to forge a broader strategy to contain Iran in the Middle East. A U.S. withdrawal would re-impose sanctions on Iran that would reduce Iranian crude exports, according to analysts.

Traders are now anticipating the weekly changes in U.S. oil inventories ahead of this afternoon's report from the American Petroleum Institute (API) and Wednesday morning from the Energy Information Administration (EIA).

Dominick Chirichella in the Energy Management Institute's Market Analysis report expects commercial crude supply to have increased during the week-ended April 27 and for drawdowns to have occurred from gasoline and distillate fuel stock levels.

At 9 a.m. ET, NYMEX June WTI futures were down $0.77 at $67.80 barrel (bbl), with ICE July Brent $0.74 lower at $73.95 bbl. NYMEX June RBOB futures slid 2.48 cents to $2.1060 gallon with the June ULSD contract 2.44 cents lower at $2.1249 gallon.

Brian L. Milne can be reached at brian.milne@dtn.com

(BAS)

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