DTN Oil Update
WTI Below $90 as Middle East Fighting Pause Continues
SECAUCUS, N.J. (DTN) -- Crude futures extended their decline for a third consecutive session Tuesday on sustained diplomatic headlines, though oil markets pulled back from session lows as friction between Iran and Oman raised fresh questions over regional transit control.
Downstream product futures held in positive territory, supported by tight global fuel supplies and structural refinery bottlenecks.
NYMEX WTI for September delivery settled down $3.35, or 4.1%, at $79.26 bbl after hitting a two-week low at $77.78. It has lost 9% since its close on Thursday, July 23.
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ICE Brent for September delivery closed down $4.27, or 4.8%, at $84.09 bbl. It hit a two-week low of $82.52 and has lost a cumulative 11% over the past three sessions.
Among refined products, NYMEX ULSD futures for August delivery rose $0.0349 to $4.1509 gallon, and front-month RBOB futures climbed $0.0072 to $3.3345 gallon.
The U.S. Dollar Index slid by 0.134 points to 101.250 against a basket of foreign currencies.
Crude futures continued their downward momentum on comments from U.S. President Donald Trump that there was a "good chance" of the U.S. and Iran reaching another ceasefire deal to normalize this week's pause in fighting.
Tehran, however, denied this. "We are not focused on negotiations with the U.S. at all, and for now, we need to see what will happen with Oman," said Iran's Deputy Foreign Minister Kazem Gharibabadi.
Negotiations were also complicated by U.S. efforts to channel ships on the Strait of Hormuz toward the southern corridor along Oman, away from Iranian territorial waters. Iran opposes this because it wants transit routed through its own northern waters to enforce control and tolls.
Meanwhile, in U.S. economic data, consumer confidence edged downward in July as consumers grew less positive about current economic conditions, the Conference Board reported. The headline confidence index fell 1.4 points to 90.8 as survey respondents cited concerns over the Middle East conflict that has sent inflation expectations soaring.
The consumer confidence data came ahead of a Federal Reserve rate decision on Wednesday, July 29, where the central bank is expected to keep its benchmark interest rate unchanged in the 3.50% to 3.75% target range.
Energy markets are also focused on inventory data for the week ended July 24, with preliminary indications due at 4:30 p.m. ET today from the American Petroleum Institute and official numbers scheduled from the U.S. Energy Information Administration at 10:30 a.m. ET on Wednesday, July 29.