DTN Oil Update
Crude Prices Dip Again on Mideast Peace Effort, Fuels Rise
SECAUCUS, N.J. (DTN) -- Crude futures fell for a second consecutive day Tuesday in anticipation of greater flows in the near term through the Strait of Hormuz amid continued efforts by U.S. and Iranian peace negotiators to bring a permanent end to this year's Middle East conflict.
Fuel markets, meanwhile, edged higher on signs that supplies could remain relatively tight as the U.S. advances into the peak summer demand season.
P[L1] D[0x0] M[300x250] OOP[F] ADUNIT[] T[]
NYMEX WTI for August delivery settled down $0.65 at $73.21 bbl for a 0.9% drop on the day that added to Monday's 3.5% slide.
The front-month contract for U.S. crude has unwound approximately 30% of the war premium that drove prices to a four-year peak of $119.48 bbl in March. That spike followed a historic supply crunch triggered by late-February military actions, erasing gains from a market that traded near $67 bbl before the conflict.
August ICE Brent futures dropped by $0.82 to close at $77.08 bbl for a 1% decline on the day that added to Monday's 3.2% slide. The benchmark has steadily retreated from its April peak of $126.41 bbl, which marked its highest level since 2022 after surging from a pre-war baseline of $72 bbl.
Downstream, NYMEX ULSD futures contract for July rose $0.0615 to settle at $3.1546 gallon, while July RBOB futures edged up $0.062 lower to close at $2.9590.
Crude futures tumbled as shipping data on the Hormuz confirmed the highest volume of vessel crossings in months after the U.S. suspended sanctions on Iranian oil trade and lifted its naval blockade. Expectations for a flood of Iranian supply in crude markets after sanctions waivers announced by the U.S. Treasury on Monday also weighed.
Prior to this week, the market's main worry was over supply deficits as a 3-1/2-month long disruption of the Hormuz sidelined roughly 10 million bpd of global crude supply and sent domestic stockpiles tumbling ahead of peak summer driving demand.
Recent EIA data confirmed U.S. Strategic Petroleum Reserve volumes have plunged to their lowest levels since 1983 following aggressive emergency drawdowns.
Market participants are focused next on weekly inventory reports from the American Petroleum Institute, due at 4:30 p.m. ET, and federal inventory data on Wednesday.