DTN Oil Update
Oil Mixed as Russian Threats, Low Inventories Halt Selloff
VIENNA (DTN) -- Oil prices steadied following a four-day selloff Thursday morning as traders weighed easing supply risks in the Middle East against reported Russian plans of an escalation in the war against Ukraine and accumulating refinery outages from Ukrainian attacks. A bullish U.S. inventory report also lent price support.
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By 8:40 a.m. EDT, ICE Brent for October delivery rose $0.57 to $88.41 bbl, and NYMEX WTI for October delivery advanced $0.25 to $82.48 bbl.
Downstream, NYMEX ULSD for September delivery retreated $0.0626 to $4.1974 gallon, and front-month RBOB futures slid $0.0140 to $3.3061 gallon.
The U.S. Dollar Index strengthened by 0.036 points to 99.125 against a basket of foreign currencies.
Negotiations between Iran and Oman to establish a joint shipping corridor in the Strait of Hormuz, which would ease the crude supply disruption, were reportedly in the final stages. Officials from both countries on Wednesday signaled optimism about opening a shipping lane within the next 30 to 60 days.
Supply risks, however, rose elsewhere. Russian oil and product supply has been squeezed by recent Ukrainian attacks on refineries and export terminals, and reports that the Kremlin is no longer interested in pursuing diplomacy supported the geopolitical risk premium.
In the U.S., meanwhile, the ongoing global refined product supply shortage has drawn down diesel stockpiles to the lowest seasonal level on record last week, the Energy Information Administration reported Wednesday. Ultra-low sulfur diesel inventories fell to 93.6 million bbl, down 11% year-on-year, and more than 15% below the five-year seasonal average. Gasoline stockpiles also shrank, falling to a nine-month low 206.8 million bbl. The weekly declines left combined road fuel inventories at their lowest in 18 years.