WASHINGTON, D.C. (DTN) -- Nearest delivered New York Mercantile Exchange oil futures and Brent crude on the Intercontinental Exchange settled mixed in choppy trade Tuesday with West Texas Intermediate reversing off the3-week high, while renewed tensions in the Middle East limit losses.
Nymex June WTI futures expired $0.11 lower at $62.99 bbl while the July delivered contract finished the session at $63.13 bbl, a 14cts premium to expiring contract. ICE July Brent futures settled up $0.21 at $72.18 bbl.
Nymex June RBOB futures settled 0.94cts higher at $2.0193 gallon and the June ULSD contract gained 0.58cts to settle at $2.0794 gallon.
Middle East tensions flared up again Tuesday after Iran-aligned Houthi rebels launched another attack against Saudi Arabia, hitting a military base and an airport in the southern city of Najran. The attack came after Iran announced it had quadruped its uranium-enrichment production capacity, while Saudi Arabia called for an emergency summit on the regional security crisis. Saudi Arabia had previously accused Iran of ordering last week's drone attack on its oil pipeline and tankers off the coast of United Arab Emirates.
WTI and Brent futures climbed to 3-week highs Monday on reports that the Organization of Petroleum Exporting Countries would extend the current production cut agreement beyond June's expiration. Saudi Arabia's Energy Minister said the group reached a consensus that production targets should "roll over for the rest of the year," as global inventories remain above normal level. However, reports emerged that several scenarios are currently being considered by the group, including reduced production targets for individual countries. In April, OPEC reached 168% compliance rate with the current agreement, while holding the cumulative production near 4-year low level.
The American Petroleum Institute is due to release supply data on U.S. inventories at 4:30 p.m. EDT while official figures from Energy Information Administration are set to be published 10:30 a.m. EDT Wednesday.
Market participants expect commercial crude stocks fell 2 million bbl in the week ended May 17, after gaining 5.4 million bbl a week prior. In refined products, analysts expect U.S. gasoline inventories built by 1 million bbl last week, while distillate stockpiles fell 1 million bbl.
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