DTN Oil Update
Oil Tumbles 3% on US-Iran Ceasefire Optimism
SECAUCUS, N.J. (DTN) -- Crude prices tumbled about 3% Friday to near two-month lows after U.S. President Donald Trump called off planned retaliatory airstrikes on Iran, easing tensions in a Middle East conflict that turned hostile in recent days after months of ceasefire.
Media reports that a peace deal could be signed as early as Sunday added to the market retreat.
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By 9:10 a.m. EDT, NYMEX WTI crude for July delivery fell $2.18 to $85.53 barrel (bbl), after a session low at $83.20. ICE Brent for August slid $1.93 to $88.45 bbl after tumbling to $85.80 earlier.
Downstream, on NYMEX, July ULSD slipped by $0.1037 to $3.4094 gallon, while July RBOB retreated by $0.0451 to $3.0563 gallon.
In Forex trade, the U.S. Dollar Index remained just beneath the key 100-point level, staying flat at 99.85 against a basket of foreign currencies.
Crude prices were on track to their third weekly loss in four amid talk that a bilateral memorandum to halt Gulf hostilities could be signed as early as Sunday, with Geneva positioned as the likely venue. Iran has, however, not confirmed the prospects for such a deal.
Separately though, Iranian news outlets indicated that formal nuclear discussions related to a peace deal would commence within a 60-day window of the signing of such a memorandum.
The four-month long Iran war has caused the most severe disruption in global oil supply as blockades by both Iran and the U.S. on different ends of the Strait of Hormuz choke off 20 million bpd of petroleum liquid cargoes.