DTN Oil Update
Crude Prices Slide on Peace Talk Optimism, Products Rise
VIENNA (DTN) -- Oil and product futures were mixed Tuesday morning, with crude prices easing for a third consecutive trading day on revived peace talk optimism as the pause in fighting between the U.S. and Iran entered its fourth day.
By 8:10 a.m. ET, ICE Brent for September delivery was down $1.44 to trade near $86.92 bbl, and NYMEX WTI for September delivery fell $1.10 to $81.51 bbl.
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Downstream, NYMEX ULSD futures for August delivery advanced $0.0493 to $4.1609 gallon, and front-month RBOB futures inched higher $0.0153 to $3.3426 gallon.
The U.S. Dollar Index remained little changed, up 0.026 points to 101.410 against a basket of foreign currencies.
U.S. President Donald Trump on Monday claimed that negotiations with Iran at Tehran's request were ongoing, and said that there was a "good chance" of reaching a deal. Iran's foreign ministry denied requesting a meeting, but commented that messages were still being exchanged via mediators and that the country remained open to a diplomatic resolution.
The U.S. on late Friday halted attacks after 13 days of consecutive strikes that dashed peace hopes and sent oil prices soaring. Iran, in response, also paused strikes on U.S. assets. Attacks from Tehran-aligned militias on U.S. allies in the region, however, did not cease. Saudi Arabia on Monday reported intercepting drones launched from Iraq toward its oil facilities, and the Houthis in Yemen claimed to have targeted the Saudi East-West pipeline delivering crude oil to the Red Sea.
Despite the detente, traffic through the Strait of Hormuz remained low. Ship tracking data showed two tankers exiting the Persian Gulf on Monday. Traffic through Bab-el-Mandeb, meanwhile, picked up after plummeting amid Houthi attacks last week.
Elsewhere, Kazakh crude oil exports on Monday resumed after a week-long pause caused by drone attacks on tankers loading at CPC's Black Sea terminal. The suspension of loading operations and pipeline transport had by Sunday forced shut roughly half of Kazakh oil production.
Refined product futures shrugged off this morning's fall in crude prices, reflecting tight global fuels supply stemming from war-caused refinery outages from Russia to the Middle East, fuel export bans and a nearly four-month long Asian refining lull, and as evidenced by months of plummeting inventories, including in the United States. The U.S. Energy Information Administration (EIA) last week reported nationwide gasoline inventories expanding for the first time in a month, but the modest 765,000 bbl build still left them at the seasonally lowest in 14 years. Weekly inventory estimates by the American Petroleum Institute are scheduled for release later Tuesday, followed by EIA data on Wednesday.