DTN Oil Update
Oil Futures Plummet $4 Amid Fragile Israel-Iran Ceasefire
HOUSTON (DTN) -- Oil futures continued its downward trend on Tuesday after plunging by an average of $4 during the day, following a fragile ceasefire between Israel and Iran brokered by U.S. President Donald Trump the prior day.
The front-month NYMEX WTI futures contract fell by $3.97 to $64.54 bbl, while the ICE Brent futures contract for August delivery dropped by $4.19 to $67.29 bbl.
July RBOB gasoline futures slid $0.1294 to $2.0888 gallon, and the front-month ULSD futures contract plunged $0.0750 to trade near $2.2881 gallon.
The U.S. Dollar Index dropped by 0.410 points to 97.600.
Oil future prices have now accumulated a $9 loss since the United States attacked three Iranian uranium sites on Sunday. President Trump pledged that Iranian retaliatory strike on a U.S. base in Qatar did not warrant a military response.
Trump also announced a ceasefire agreement between Israel and Iran, which removed the geopolitical risk-premium that has propelled oil prices to a five-month high over the past two weeks. Although Israel confirmed the ceasefire on Tuesday, it launched strikes on Teheran in response to an alleged violation of the agreement. Analysts had anticipated a limited and largely symbolic strike given Israeli Prime Minister Netanyahu's statement on Tuesday that Israel had achieved its primary war target.
In domestic economic news, U.S. consumer confidence fell in June, with the index dropping by 5.4 points to 93.0 from 98.4 recorded in May, according to the Conference Board report released this morning. The Expectations Index, which reflects consumers' short-term outlook for income, business, and labor market conditions, dropped by 4.6 points to 69.0, remaining below the threshold of 80 that typically signals a recession ahead. The average 12-month inflation expectations eased to 6.0% in June, down from 7% in May.
Tariffs remained on top of consumers' minds and were frequently associated with concerns about their negative impacts on the economy and prices, the report said.
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