WASHINGTON (DTN) -- Oil futures nearest delivery on the New York Mercantile Exchange and Brent crude on the Intercontinental Exchange settled mixed in back-and-forth trading Tuesday, as market participants await U.S. weekly inventory figures, while Middle East tensions continue to offer market support.
NYMEX August West Texas Intermediate dipped $0.07 to $57.83 per barrel (bbl) at settlement, while ICE August Brent futures settled up $0.19 at $65.05 bbl after both contracts traded sideway for the most of the session. NYMEX July ULSD futures were up 1.45 cents at $1.9234 gallon at settlement.
NYMEX July RBOB futures settled at a fresh better-than three-week spot high at $1.8772 gallon, up 2.23 cents, again finding support from the June 21 disruption of refinery operations at Philadelphia Energy Solutions 335,000-barrel-per-day (bpd) Philadelphia Refining Complex -- the largest refinery on the East Coast -- alongside expectations gasoline inventory was drawdown nationwide last week. Additional details indicate PES completely shut the 200,000 bpd Girard Point section of the refinery where last week's explosions and fire occurred, while reports also suggest a 30,000 bpd alkylation unit was destroyed. Friday's incident occurred while a 50,000 bpd fluid catalytic cracker was undergoing repairs at the Point Breeze section of the refining complex following a fire on June 10. An alkylation unit produces high-octane blending components, and the FCC is a gasoline producing unit.
The crude contracts ended Tuesday's session little changed, as Middle East tensions remained front and center, spurring investor concerns over a potentially quickly intensifying conflict in the major oil producing region. Iran declared today that the path towards peaceful negotiations with the United States is permanently closed, while U.S. President Donald Trump warned that any attack by Iran on "anything American" will be met with great and overwhelming force. Last week the White House abruptly aborted an air strike against Iran, leaving Middle East tensions simmering without a clear resolution.
Oil markets were also gripped with uncertainty over Russia's commitment to rolling over 1.2 million bpd of production cuts under the current supply agreement with the Organization of the Petroleum Exporting Countries into the second half of the year. Russia's top officials again questioned the country's participation in the accord, pointing to a wait-and-see approach before the G20 Summit scheduled for later this week. OPEC+ members postponed their gathering to July 1-2 due to a planned meeting between Trump and Chinese President Xi Jinping, which are set to discuss a bilateral trade agreement.
Preliminary data on U.S. crude and products stocks is due for release at 4:30 p.m. EDT by American Petroleum Institute, while official figures from Energy Information Administration will be published 10:30 a.m. EDT Wednesday. Market participants expect U.S. crude stocks to have fallen 2.8 million bbl in the week ended June 21, while both gasoline and distillate inventories are estimated to have been drawn 1.1 million bbl in the profiled week.
The bullish outlook on U.S. petroleum supplies comes after government data last week showed across the board supply draws amid record high gasoline demand and a lower rate of domestic crude production.
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