DTN Oil Update
Oil Steady Despite IEA Projects Global Demand Drop in 2026
HOUSTON (DTN) -- Crude futures were little changed on Friday, amid a bearish sentiment driven by renewed military action in the Middle East and over the Strait of Hormuz.
According to the Associated Press, the United States launched new airstrikes against Iran early Thursday, July 9, prompting Tehran to retaliate by targeting U.S.-allied Mideast countries. The exchange of fire threatened a fragile ceasefire agreement intended to help end hostilities in the Middle East.
The front-month NYMEX WTI futures contract edged up $0.13 to $72.21 bbl. ICE Brent crude for September delivery rose $0.28 to $76.58 bbl.
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The NYMEX ULSD futures contract for August rose $0.0476 to $3.6192 gallon. NYMEX RBOB gasoline for August slid $0.0421 to $2.9966 gallon.
The U.S. Dollar Index inched up by 0.019 points to 100.71 against a basket of foreign currencies.
The weakness in the oil futures market was also supported by the International Energy Agency (IEA) projection that global oil demand is projected to drop by 1 million bpd year-on-year in 2026, marking the first annual decline since 2020.
Global supply rebounded by a sharp 4.1 million bpd to 98.8 million bpd in June following a midmonth ceasefire agreement between the U.S. and Iran. However, overall production remained 9.4 million bpd below pre-war levels after previous hostilities disrupted nearly 14 million bpd of flows, the IEA said in its monthly report.
The IEA warned that the fragile supply recovery could quickly reverse if shipping on the Strait of Hormuz faces more disruptions.
Goldman Sachs noted that energy shipping traffic on the Hormuz had reached 80% of normal flows by end of last week as tankers rushed to escape the previously blockaded chokepoint after the June 17 ceasefire between the U.S. and Iran. Both sides declared the pact over on Wednesday, July 8, as hostilities resumed.
Separately, the Commodity Futures Trading Commission (CFTC) on Thursday halted the listing of a contract that would have enabled the Chicago Mercantile Exchange (CME) to begin 24/7 trading of crude oil futures as soon as Saturday.
On June 22, the CFTC issued a request for comment seeking public input on the propriety of extension of standard futures contracts to 24/7 trading, including crude oil. Despite an ongoing public comment period and known risks as to whether such trading on crude oil would be consistent with the Commodity Exchange Act and Commission regulations thereunder, on July 8, CME sought to self-certify such a contract.
"CME's decision to disregard the Commission's effort to undertake a reasoned analysis of the critical issues at stake is wholly inappropriate and necessitates Commission action to stay the certification," said Chairman Michael S. Selig.