DTN Oil Update
Oil Futures Rise 2% on Tighter Supply Outlook
HOUSTON (DTN) -- Oil futures climbed about 2% on Tuesday, with the front-month ICE Brent futures contract rising above the $90 bbl for the first time in weeks. Prices were supported by expectations of tighter supplies as an escalation of the Middle East conflict involving Pakistan overshadowed diplomatic efforts to secure a ceasefire deal.
ICE Brent for September delivery rose $2.30 to $91.52 bbl, and NYMEX WTI for August delivery climbed $1.68 to $84.91 bbl.
P[L1] D[0x0] M[300x250] OOP[F] ADUNIT[] T[]
Downstream, NYMEX ULSD futures for August delivery increased $0.0174 to $4.1364 gallon, and front-month RBOB futures rose $0.0174 to $3.4050 gallon.
The U.S. Dollar Index inched up 0.229 points to 100.010 against a basket of foreign currencies.
Hostilities between the United States and Iran entered their tenth day, exacerbating blockades of the Strait of Hormuz. Traffic at the waterway remains stalled as tracking data indicated that only a single laden tanker visibly exited the Persian Gulf on Monday.
Iranian Interior Minister Eskandar Momeni visited Pakistan, which has positioned itself as a key mediator in the conflict that is seeking a peace agreement between the U.S. and Iran. Still, it was unclear whether the talks would lead to a ceasefire. U.S. President Donald Trump, meanwhile, said Washington had "no interest in meeting."
Uncertainty surrounding the Middle East conflict and the potential for tighter oil and gas supplies continued to support bullish sentiment in oil futures markets, alongside elevated seasonal demand during the summer driving season. The ongoing hurricane season has already added pressure over potential supply disruptions.
Chevron said Monday it had fully shut its 60,000 boepd Petronius platform and moved all personnel onshore, while evacuating non-essential workers from its 50,000 boepd Tubular Bells and 75,000 boepd Blind Faith platforms.
Chevron said its remaining Gulf assets are operating normally. Separately, BP began evacuating non-essential personnel from its Thunder Horse and Na Kika deepwater production platforms in the Mississippi Canyon area off Louisiana's coast as Tropical Storm Bertha advances westward across the eastern Gulf of Mexico. Bertha, currently near the Florida-Alabama border, is generating heavy rain and flash flooding concerns along the central Gulf Coast, according to DTN Weather Risk communicators.
U.S. Energy Information Administration data showed commercial crude oil inventories declined to their lowest level in nearly eight months on the week ended July 10.
