DTN Oil Update

Barani Krishnan
DTN Refined Fuels Market Reporter

SECAUCUS, N.J. (DTN) -- Crude futures rose from three-month lows on Wednesday morning as traders weighed the potential outcome of a U.S.-Iran peace deal on supply.

Anticipation that the U.S. Energy Information Administration could report another substantial weekly crude draw in inventory numbers due at 10:30 a.m. ET also fueled the upward momentum. The American Petroleum Institute, in a separate report issued Tuesday, June 16, cited an 8.3 million bbl drop in crude stocks for the week ended June 12.

The trade's attention is also on a Federal Reserve interest rate decision due at 2 p.m. ET, where the central bank is expected to leave rates unchanged in a 3.5-3.75% range.

By 9:35 a.m. ET, NYMEX WTI for July delivery was up $0.94, or 1.2%, to $76.99 bbl after tumbling 5.4% in the previous session to $76.39 bbl, its lowest close since March 10.

ICE Brent for August delivery rose $1.08 to $80.04 bbl, recovering from a prior drop of 4.7% to $79.25 bbl, its lowest value since March 6.

Downstream, NYMEX ULSD futures for July climbed $0.0598 to $3.2300 gallon, while NYMEX RBOB for July advanced 0.0054 to $2.8859 gallon.

The U.S. Dollar Index was little changed, up 0.091 points to 99.37 against a basket of foreign currencies.

Energy markets fell broadly over the two past two sessions on expectations that a memorandum of understanding to be signed between Iran and the U.S. on Friday would reinforce another 60 days of ceasefire in the Middle East conflict, paving the way for a gradual resumption of maritime traffic through the Strait of Hormuz chokepoint, largely impassable over the past 3-1/2 months to some 20 million bpd of petroleum liquids.