DTN Oil Update
WTI Under $70 as Oil Drops Again in June on Hormuz Flows
SECAUCUS, N.J. (DTN) -- Crude futures fell Tuesday, finishing June lower after May's slide, as accelerating oil flows out of the Persian Gulf erased much of the Iran war risks that drove the market to four-year highs just months ago.
While both WTI and Brent remained about 20% higher on the year, the market is "in a corrective type of trade as bearish fundamentals continue to mount with more traffic moving through the Strait of Hormuz", noted Dennis Kissler, senior vice president of trading at BOK Financial in Oklahoma City.
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NYMEX WTI for August delivery fell $1.25 to settle the final session of June at $69.50 barrel (bbl). On the day, it fell 1.8%. for the month, it dropped 20% after May's 17% slide, resulting in a second-quarter deficit of 31%.
ICE Brent for August slid $0.23 to close at $79.92. For the session, Brent was 0.3% lower. For the month, it lost about 20% after May's 17% retreat, leaving it down 23% for the second quarter.
Notwithstanding those losses, the U.S. crude benchmark was up 21% on the year, legacy of the rally that drove it to a four-year high of $ 119.48 bbl in March. Brent remained 20% up on the year, after racing to $126.41 in April, its highest since 2022.
Downstream, NYMEX ULSD futures for August delivery slipped by $0.0149 to finish at $3.3168 gallon while August RBOB retreated by $0.047 to end the session at $3.0144 gallon. ULSD scaled above $4.60 gallon in March and RBOB above $3.77 in May, both reaching four-year highs.
The U.S. Dollar Index rose by 0.048 points on Tuesday to 100.925 against a basket of foreign currencies.
Tuesday's bearish settlement in crude came as Morgan Stanley cut its fourth-quarter Brent forecast to $75 bbl from $80 and its end-2027 prediction to $70 from $80. JPMorgan, meanwhile, pegged Brent at $86 bbl for the third quarter and $78 by the year-end.
Some of Tuesday's downside in oil was mitigated by renewed Iran-U.S. tensions. As U.S. negotiators and diplomats huddled in Qatar for further talks, Iran's Foreign Ministry demanded the immediate release of some $6 billion of frozen Iranian assets, saying peace talks would not continue otherwise.
DMarket participants also directed some of their focus at upcoming U.S. inventory data for the week ended June 26, with the American Petroleum Institute due to report that at 4:30 p.m. ET Tuesday, ahead of the U.S. Energy Information Administration at 10:30 a.m. EDT Wednesday.