DTN Oil Update
Oil Down 3% as Mideast Tensions Offset by Ceasefire Bids
SECAUCUS, N.J. (DTN) -- Crude and product futures plunged Thursday on intensifying expectations that the Middle East conflict was grinding towards a settlement, despite Hezbollah militants rejecting a Washington-brokered ceasefire between the group and Israel that was aimed at fulfilling Iran's precondition for talks.
Additional downward pressure came after the U.S. House of Representatives passed a symbolic War Powers Resolution aimed at preventing the Trump administration from prolonging military operations against Iran.
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Reversing a three-day rally, NYMEX WTI crude for July delivery settled down $2.98, or 3.1%, at $93.05 bbl, erasing a third of its 9% advance from earlier in the week.
ICE Brent crude for August delivery shed $2.78, or 2.8%, to finish the session at $ 95.03 bbl, after a 7% run-up from Monday through Wednesday.
The midweek market surge had been heavily supported by official U.S. Energy Information Administration data showing commercial crude stocks drew down by 8 million bbl for a sixth consecutive week. That steeper-than-expected supply decline brought domestic crude inventories down to 433.7 million bbl, marking their lowest operational level since mid-February.
Refined product complexes also experienced sharp selloffs alongside the crude benchmarks during Thursday's volatile trading session.
NYMEX ULSD futures for July delivery finished down $0.0249 at $ 3.6738 gallon, while July RBOB gasoline futures tumbled $0.0933 to settle at $ 3.0383 gallon.
The broader macro environment saw the U.S. Dollar Index ease 0.130 points to 99.375 against a basket of major foreign currencies, offering minor technical support.
Prices fell from the start of Thursday's session as market participants took note of the U.S.-brokered ceasefire between Israel and Hezbollah. The market remained in negative territory even after Hezbollah leader Naim Kassem rejected the terms of the truce, which he called an Israeli attempt to force the surrender of his group.
In Congress, a narrow 215-208 House vote to tie the Trump administration's hands on the war highlighted deep political fractures over the three-month-old conflict. The vote itself would do little to curb U.S. President Donald Trump's actions on Iran as it lacked a two-thirds majority -- which is crucial for avoiding a veto of the legislation by the president.