DTN Oil Update
Oil Dips as Oil Rallies 4th Straight Day as US, Iran Renew Rhetoric
SECAUCUS, N.J. (DTN) -- Crude futures rebounded from their early weakness on Tuesday to rally for a fourth straight session as escalating rhetoric between the U.S. and Iran offset hopes for a resolution to the Strait of Hormuz standoff.
NYMEX WTI crude for September delivery rose $1.07, or 1.3%, to settle at $83.20 barrel (bbl). ICE Brent crude for October climbed $1.19, or 1.4%, to close at $88.91 bbl.
Among refined products, NYMEX ULSD for September delivery advanced by $0.0627, or 1.5%, to close at $4.2525 gallon. NYMEX RBOB for September gained $0.0012, or 0.04%, to finish at $3.1366 gallon.
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The U.S. Dollar Index climbed 0.057 points to 99.760 against a basket of currencies.
The market rebounded after an Iranian Revolutionary Guard Corps spokesperson warned via state media that any threat to Tehran would put energy pipelines, power facilities, and global internet infrastructure at risk.
Separately, Mohsen Rezaei, secretary of Iran's Supreme National Security Council, said ongoing Iran-Oman shipping discussions remain independent from the issue of reopening the blockaded strait.
U.S. President Donald Trump, meanwhile, told Voice of America that Washington has "no shortage of missile munitions" and retains the capability to strike Iran, signaling an ongoing impasse in peace negotiations.
The back-and-forth in rhetoric is keeping the market volatile as traders try to discern actual cargoes that get to cross the Hormuz.
Tanker tracking data in recent days have shown only a fraction of normal vessel traffic risking transit through the waterway, keeping the geopolitical risk premium firmly embedded in front-month futures.
The Energy Information Administration (EIA) raised its crude price forecasts as transit constraints through the Strait of Hormuz continue to weigh on supply. In its Short-Term Energy Outlook for August, released Tuesday, the EIA raised its 2026 annual average forecast for Brent to $86.67 bbl, versus the $81.91 bbl it projected for July.
On the inventory front, traders await the American Petroleum Institute's reading on stockpiles of crude, gasoline and distillates for the week ended Aug. 7. The report will land ahead of official inventory data for the same week due from the U.S. Energy Information Administration (EIA) at 10:30 a.m. EDT on Wednesday.
For the week ended July 31, the EIA reported that commercial crude oil inventories increased by 2.5 million bbl to 407 million bbl during the profiled week but remained 16.7 million bbl, or 3.9%, below the same week last year.