DTN Oil Update

Barani Krishnan
DTN Refined Fuels Market Reporter

SECAUCUS, N.J. (DTN) -- Crude oil futures fell Monday morning (6/22) after U.S. and Iranian negotiators touted progress in the first round of peace talks which wrapped up in Switzerland earlier today.

By 08:00 a.m. ET, ICE Brent for August delivery was down $1.63 to trade near $78.94 bbl, and NYMEX WTI for July delivery eased by $0.10 to $76.50 bbl. The August contract fell $0.88 to $74.97 bbl.

Downstream, NYMEX RBOB futures for July delivery retreated $0.0015 to $2.9934 gallon. ULSD futures bucked the trend, with the front-month contract rising $0.0219 to $3.1492 gallon.

The US dollar index inched higher by 0.095 points to 100.715 against a basket of foreign currencies.

Delegates on Sunday agreed on a roadmap towards a permanent end to the war. This came after signing a memorandum of understanding last week which extended the ceasefire by 60 days and called for a reopening of the Strait of Hormuz. The interim deal also called for the cessation of fighting on all fronts, including Lebanon. On Friday, Israel and Hezbollah agreed to a ceasefire which has largely held since late Saturday.

Oil exports through the Strait of Hormuz picked up last week after Iran lifted the blockade, providing some relief to a supply-starved market. Iranian oil flows have also restarted after the U.S. ended the embargo on Iranian maritime trade. A statement by Iran's foreign minister Abbas Araghchi on Monday claiming that the U.S. agreed to waive sanctions on Iranian energy exports further weighed on prices.

Hundreds of laden tankers have been stranded in the Persian Gulf, ready to deliver a wave of crude oil to refiners globally once safe passage is guaranteed. Estimates on how quickly flows will return after this initial jump, however, vary widely. Shut-in production will only gradually ramp up, and many shippers may initially be wary of reentering the Gulf as long as the navigational status of the strait remains volatile and a final agreement has not been reached.