DTN Oil Update
Oil Steadies after Trump Questions Need for Iran Deal
VIENNA (DTN) -- Oil futures steadied Thursday morning, paring earlier losses after U.S. President Donald Trump said the U.S. should not seek a deal with Iran.
By 09:20am EST, ICE Brent for January delivery was up $0.42 to trade near $93.18 bbl, while NYMEX WTI for December delivery fell $0.16 to $86.37 bbl.
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Downstream, NYMEX ULSD for December delivery slid $0.0054 to $4.2059 gallon, while front-month RBOB futures advanced $0.0106 to $2.6181 gallon.
The U.S. dollar index was steady, up 0.005 points to 102.825 against a basket of foreign currencies.
The President on Thursday said that he asked Vice President JD Vance, who was recently leading the diplomatic efforts, to instead focus on domestic policy, adding that "We don't need a deal with Iran." Crude oil futures jumped by more than $1.30 per barrel of crude oil (b)bl in reaction to the statement posted on social media.
The comments fueled uncertainty around the conflict that has turned into a months-long stalemate and directly contradicted recent statements by senior U.S. officials engaged in diplomatic efforts to end the war and reopen the Strait of Hormuz.
Oil prices slid earlier in the session on lower perceived geopolitical risks and an OPEC report showing Middle Eastern crude oil production bouncing back near pre-war levels in October, highlighting a recovery in flows that took the market by surprise given that Iranian attacks on tankers near the Persian Gulf reached a new peak last month.
Despite rebounding oil supply, global inventories have likely continued to slide last month, according to monthly reports published this week by the U.S. Energy Information Administration (EIA) and OPEC. EIA data also showed commercial crude oil inventories in the U.S. rapidly declining over the past six weeks, plummeting from seasonally typical levels to a more than 5% deficit compared to the five-year seasonal average. The drop, that coincided with the end of significant releases from emergency stockpiles, was fueled by domestic refiners continuing to operate at an unusually rapid clip for the time of year and came despite record high U.S. crude production.
Market participants will be on the lookout for the EIA's weekly inventory report scheduled for 12pm ET release today, particularly considering Tuesday's American Petroleum Institute report that flagged surprisingly large builds to domestic fuel and crude oil stocks.
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