DTN Oil Update
Oil Up 3rd Straight Day on Iran Tensions, US Inventories
SECAUCUS, N.J. (DTN) -- Crude and product futures rose for a third straight session Wednesday morning on concerns that intensifying Middle East hostilities were stalling an imminent end to the Iran war and reopening of the Strait of Hormuz, which is crucial to energy shipments.
Market momentum was also driven by expectations of another drop in domestic crude and fuel stockpiles to be announced by the U.S. Energy Information Administration (EIA) in inventory data due at 10:30 a.m. ET for the week ended May 29. Crude stocks fell for a fifth consecutive week while distillate fuel inventories dropped to their lowest level since 2003 during the prior week to May 22.
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Ahead of the EIA data, the American Petroleum Institute's reading for domestic crude inventories showed a drop of 6.8 million bbl for the week ended May 29. Forecasts had called for a decline of only around 3.6 million bbl.
By 9:10 a.m. ET, NYMEX WTI for July delivery was up $1.41 to $95.15 bbl, rising 1.5% after a 7% advance over the past two sessions.
ICE Brent for August delivery rose by $1.41 to $97.41 bbl, adding 1.5% to the prior two-day rally of 4%.
Among refined products, NYMEX ULSD futures for July delivery edged higher by $0.1004 to $3.7991 gallon, while July RBOB advanced $0.0166 to $3.1609 gallon.
The U.S. Dollar Index was higher by 0.251 points to 99.435 against a basket of foreign currencies.
Renewed military exchanges between U.S. and Iranian forces near Hormuz chokepoint have effectively frozen recent diplomatic breakthrough hopes. Reports indicate Washington and Tehran have halted direct communications despite ongoing claims of active negotiations.
Kuwaiti air defenses intercepted inbound Iranian missile attacks, while separate Israeli military operations continued pushing forward through southern Lebanon. Investors are aggressively tracking these escalating battlelines ahead of another scheduled round of regional talks.