DTN Oil Update
Oil Slips as US Keeps Ceasefire, Tries to Free Hormuz
SECAUCUS, N.J. (DTN) -- Energy markets fell Tuesday on relative calm in the Middle East after an exchange of fire a day ago between U.S. and Iranian forces in the Strait of Hormuz, as well as a drone strike that left a UAE petroleum complex in flames.
U.S. assurances that it was holding to its ceasefire in the broader Iran war also eased the tensions that ignited broad rally Monday across crude and refined products.
NYMEX WTI crude for June delivery settled down $4.15, or 4%, at $102.27 barrel (bbl), virtually erasing all of the prior session's gains.
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By 2:30 p.m. EDT, Brent crude's July contract on ICE was down $4.47, or 4%, to $109.97 bbl. It rose 6% on Monday after an Iranian drone strike on the VTTI Fujairah Terminals in UAE's eastern port city of Fujairah marked the first major escalation in almost a month in the conflict, since a ceasefire announced April 8.
Among refined products, NYMEX ULSD futures for June delivery edged down $0.0381 to $4.0351 gallon. NYMEX RBOB futures for June eased $0.1146 to $3.6236 gallon.
The U.S. Dollar Index retreated by 0.058 points to 98.32 against a basket of foreign currencies.
The slide came as the U.S. attempted to reopen the Hormuz waterway, blocked by Iran since it came under U.S.-Israeli bombings on Feb. 28. The blockade, along with a U.S. cordon that prevents any vessel from entering or leaving Iranian ports, has virtually denied the world of some 20 million barrels per day (bpd) of petroleum liquids that transit the Hormuz before reaching global consumers.
There are currently about 22,500 seamen on over 1,550 commercial vessels "trapped" in the Arabian Gulf, unable to cross the strait, Dan Caine, the top U.S. general, said.
Since Monday, two U.S. commercial vessels, were aided in their crossings by U.S. Navy destroyers in the Gulf, U.S. Secretary of War Pete Hegseth said.
"Near term, traders will remain focused on whether ships get to make successful voyages through the strait as tensions remain elevated," energy trader BOK Financial said.
Market participants' attention will also be on U.S. energy inventory data for last week, due from the American Petroleum Institute (API) and the U.S. Energy Information Administration (EIA). The EIA, which reported a 1.8-million-bbl drop in crude stockpiles for the week ended April 24, will update the market at 4.30 p.m. EDT with numbers for the week ended May 1. The EIA's reading is due on Wednesday at 10:30 a.m. EDT.
On the economic front, the U.S. trade deficit edged higher in March, the Commerce Department and U.S. Census Bureau reported Tuesday. The goods and services deficit stood at $60.3 billion, up by $2.5 billion, or 4.4%, from a revised $57.8 billion in February.