DTN Oil Update

Barani Krishnan
DTN Refined Fuels Market Reporter

VIENNA (DTN) -- Oil futures were steady Friday morning, with most contracts remaining largely flat on the week after having clawed back a substantial chunk of the losses from Monday's sell-off during a turbulent trading week.

By 09:15 a.m. EST, ICE Brent for January delivery was up $0.82 to trade near $96.64 a barrel of crude oil (bbl), and NYMEX WTI for December delivery rose $0.34 to $89.08 bbl.

Downstream, NYMEX ULSD for December delivery ticked up $0.0366 to $4.3231 gallon, while front-month RBOB futures slid $0.0025 to $2.6683 gallon.

The U.S. Dollar Index remained little changed, up 0.035 points to 103.13 against a basket of foreign currencies.

Hopes of an imminent end to the war that resulted in the largest oil supply disruption in history, sparked by dovish comments from the White House and signs of diplomatic progress at the beginning of the week, quickly faded amid increasingly conflicting messaging around U.S.-Iranian peace prospects and continued attacks on tankers and oil infrastructure in the Middle East. The largest jump in prices this week came in reaction to U.S. President Donald Trump on Thursday saying that the U.S. should not seek a deal with Iran, and directing the Vice President, the most senior U.S. official leading diplomatic efforts to date, to instead focus on domestic policy.

Reactions to this week's market outlook updates by main forecasters were mixed. The International Energy Agency on Friday said that the global oil market last month moved into a surplus for the first time since the beginning of the war and revised higher the expected decline in global demand to 2.7 million barrels per day (bpd) averaged over the year. While rather bearish for crude, the same report also flagged a continuously tight diesel market that is likely to extend well into 2027, even when factoring in the sizable, coordinated release of strategic diesel stocks from its European partners.

U.S. Energy Information Administration data published Thursday was equally mixed. Crude demand soared to a new seasonal high as refiners continued to profit from global fuels shortage induced high margins. At the same time, however, surprisingly large builds to refined fuel inventories -- distillate fuel oil stocks alone jumped by 4.1 million bbl last week -- stoked the flames of demand growth woes.

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