Oil Down 3% as New U.S.-Iran Talks Seen


   
Karim Bastati
DTN Analyst

   VIENNA (DTN) -- Oil futures fell as much as 3% on Tuesday (4/14) morning 
amid reports that Iranian and U.S. officials were set to meet for a second 
round of talks in Islamabad later this week, raising hopes again for a solution 
to the Middle East conflict.

   By 08:55 am ET, NYMEX WTI crude for May delivery was down $3.18, or 3.2%, to 
$95.90 bbl, while ICE Brent for June delivery slid $1.48, or 1.5%, to $97.88 
bbl.

   Downstream, RBOB futures for May delivery slipped by $0.0339 to $3.0821 
gallon, and front-month ULSD futures retreated by $0.0379 to $3.7962 gallon.

   The US dollar index softened by 0.343 points to 97.82 against a basket of 
foreign currencies.

   The current two-week ceasefire between the U.S. and Iran is set to expire 
April 21. Tehran has repeatedly sought a permanent end to hostilities rather 
than a temporary truce. Last weekend's negotiations between delegations from 
Washington D.C. and Tehran, however, ended without breakthrough.

   Vice President JD Vance told reporters after the meeting that the U.S. had 
presented its "best and final offer" for a deal. Iranian foreign minister Abbas 
Araghchi said the failure to reach an agreement was allegedly due to the 
constant shifting of U.S. demands despite progress on several issues.

   Remarks by U.S. President Trump on Monday also added to hopes of a detente. 
"I think Iran will now agree on nuclear", Trump said, referencing a key U.S. 
demand that Iran stop all uranium enrichment -- something Tehran has rejected 
so far. He added that he was "called this morning by Iran, they want a deal."

   The International Energy Agency, meanwhile, warned that oil futures prices 
are not reflecting the scale of the oil supply crisis triggered by the 
U.S.-Israeli war on Iran and the subsequent closure of the Strait of Hormuz. 
The Paris-based energy watchdog is expecting high prices and supply shortages 
to lead to demand destruction, which is likely to spread to regions outside of 
the Middle East and Asia.

   In its latest oil market report published today, the IEA forecast global oil 
demand to shrink by 80,000 bpd in 2026, compared with the 640,000 bpd expansion 
predicted in last month's report. The agency forecast global demand to plummet 
by 1.5 million bpd in the second quarter, which would mark the sharpest decline 
since the 2020 pandemic.




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