DTN Oil Update
Oil Slides as Trade Gauges Impact of Mideast Escalation
SECAUCUS, NJ (DTN) -- Oil prices slid Thursday (6/11) as market participants tried to assess whether fresh escalation in the Middle East conflict between the U.S. and Iran would add to the global supply deficit or represented geopolitical noise of a familiar kind.
Since Monday, the downing by Iran of a U.S. military helicopter near the Strait of Hormuz has resulted in intense war language from the Trump administration pledging a commensurate response. Tehran has been equally vocal with its rhetoric. But media coverage of the new hostilities appeared limited to military targets and not energy infrastructure.
Over the past 48 hours, the U.S. directed precision strikes toward peripheral targets, coastal radar stations, and two southern Iranian water reservoirs, bypassing vital oil production fields. Tehran countered with missile salvos against heavily fortified allied military hubs in Jordan, Bahrain, and Kuwait, although many of these appeared to have been intercepted.
After rallying 2% or more Wednesday on the new tensions in the Gulf and following a seventh weekly U.S. crude drawdown announced by the Energy Information Administration, energy markets pulled back by mid-morning Thursday, taking into account the latest nature of the escalation.
By 9:25 a.m. ET, NYMEX WTI crude for July delivery fell $0.45 to $89.58 bbl, after a session high at $93.64. ICE Brent for August slid $0.64 to $92.50 bbl after peaking at $ 95.50.
Downstream, on NYMEX, July ULSD slipped by $0.0216 to $3.5910 gallon, while July RBOB retreated by $0.0042 to $3.1057 gallon.
On the forex market, the U.S. dollar index remained just beneath the key 100-point level, rising 0.216 points to 100.150 against a basket of foreign currencies.
On the macroeconomic front, U.S. wholesale inflation accelerated sharply in May, with producer prices jumping 6.5% over the past 12 months, Bureau of Labor Statistics data showed Thursday. The steep annual surge underscores intensifying inflationary pressures across the domestic supply chain, marking the fastest pace of wholesale price gains since a 7.4% spike in November 2022.
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