DTN Oil Update
Oil Back Near Pre-War Levels on Rising Persian Gulf Supply
VIENNA (DTN) -- Oil futures fell for a fourth consecutive day Thursday morning, with Brent's front-month contract dropping to pre-war levels in intraday trading, driven by growing confidence that the Strait of Hormuz will remain open and expectations of a flood of oil leaving the region as hundreds of laden tankers were ready to depart.
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By 8:11 a.m. EDT, ICE Brent for August delivery was down $0.69 to trade near $73.05 bbl, after touching a session low of $72.06 bbl. NYMEX WTI for August delivery fell $0.59 to $69.75 bbl.
Downstream, NYMEX ULSD futures for July delivery retreated $0.0330 to $3.1432 gallon. Gasoline futures bucked the trend, with RBOB's front-month contract rising $0.0155 to $2.8973 gallon.
The U.S. Dollar Index moved higher for the seventh consecutive trading day, up 0.105 points to 101.495 against a basket of foreign currencies.
On Wednesday, Brent's prompt-spread closed below zero for the first time since the outbreak of the U.S.-Israeli war on Iran on expectations of an initial wave of tankers inundating the market with Middle Eastern oil. The nearly four-month long supply disruption caused widespread demand destruction, which helped create the temporary imbalance.
Vessel tracking data indicated that most of the increased traffic through the Strait of Hormuz consisted of ships leaving the Persian Gulf. Market participants will be closely watching how inbound traffic develops over the coming weeks to gauge the pace of supply recovery. Brimming inventories are allowing producers in the Middle East to sell their oil at steep discounts, but high insurance and shipping costs may for now still blunt buying interest.
Oil inventories in the U.S., meanwhile, continued to shrink at a rapid pace. The Energy Information Administration on Wednesday reported that commercial crude oil stocks last week fell to their lowest level since January 2025. Another 9 million bbl release from the Strategic Petroleum Reserve, meanwhile, left emergency stockpiles at their lowest since 1983.
High international demand for U.S. crude oil and an import lull amid soaring shipping costs have over the past months led to a sharp decline in domestic inventories. Net imports of crude oil have over the past four weeks averaged 820,000 bpd, down from 2 million bpd in the same period last year, EIA data showed.