DTN Oil Update

Karim Bastati
DTN Analyst

VIENNA (DTN) -- Oil futures fluctuated Tuesday morning, rising sharply after Iran's Supreme Leader Khamenei cast fresh doubts over the progress after four rounds of nuclear talks. The price spike was short-lived, with futures rapidly shedding post-comment gains.

NYMEX-traded WTI for June delivery was down $0.19 bbl to trade near $62.50 bbl, and ICE Brent for July delivery fell $0.28 bbl to $65.26 bbl.

June RBOB gasoline futures softened by $0.0031 to $2.1357 gallon, while the front-month ULSD futures contract was up $0.0002 to $2.1279 gallon.

The U.S. Dollar Index softened by 0.083 points to 100.205.

Khamenei on Tuesday said the ongoing talks are unlikely to lead to a deal between the U.S. and Iran, pointing to past fruitless indirect negotiations. The comments by the Iranian head of state, which included calling U.S. demands on Uranium enrichment "outrageous," dashed some market participants' hopes of a quick return of Iranian barrels to the market and caused a brief spike in oil prices.

Given current demand growth developments, robust non-OPEC production growth and looming output hikes by OPEC+, it is doubtful, however, that the return of even several hundred thousand bpd of Iranian oil exports would swing the global balance into lasting undersupply.