Oil Dips Another 4% on Middle East Diplomacy Maneuvers


   
Barani Krishnan
DTN Refined Fuels Market Reporter

   SECAUCUS, NJ (DTN) - Crude futures extended losses on Tuesday (8/4) morning 
as market participants digested headlines suggesting slow but steady progress 
toward diplomacy in the Middle East.

   By 8:00 a.m. ET, NYMEX WTI for September delivery was lower by $3.43, or 
4.2%, at $76.91 bbl. The U.S. crude benchmark fell 5% on Monday (8/3).

   ICE Brent for October delivery slid by $2.92, or 3.5%, to $80.85 bbl.  The 
global crude benchmark lost 4.7% in the prior session.

   Downstream, in diesel, NYMEX ULSD futures for September delivery eased by 
$0.1543, or 4%, to $3.7229 gallon.  It slid 6% on Monday.

   On the gasoline front, NYMEX September RBOB softened by $0.1036, or 3.6%, to 
$2.8631 a gallon, extending the 8% tumble from the previous session.

   The US dollar index strengthened by 0.034 points to 99.815 against a basket 
of currencies.

   Diplomatic efforts to resolve the U.S.-Iran conflict were ongoing, with 
negotiators focusing on immediate de-escalation and reopening the Strait of 
Hormuz, according to media reports citing Qatari officials serving as key 
mediators between Washington and Tehran. A draft text for a potential peace 
framework, prioritizing a short-term resolution, was circulating among parties, 
despite the lack of direct bilateral talks, the reports said.

   Energy futures experienced pronounced losses on Monday as U.S. President 
Donald Trump again left the door open for negotiations versus new hostilities.

   But Iranian Foreign Ministry spokesperson Esmaeil Baqaei said Tehran's focus 
was on working with Oman to establish a maritime corridor on the Strait of 
Hormuz that it insists ships must use when traversing the waterway. Iran 
maintains the passage is for the safety of passing vessels, while Washington 
contends it is a ruse to collect a toll, particularly from oil- and gas-laden 
tankers, for using the channel.

   On the U.S. inventory front, the American Petroleum Institute will report at 
4:30 p.m. ET its reading on stockpiles of crude, gasoline and distillates for 
the week ended July 31. The U.S. Energy Information Administration will report 
official inventory data for the same week at 10:30 a.m. ET on Wednesday (8/5). 
For the week ended July 24, the EIA reported that commercial crude oil 
inventories decreased by 7.2 million bbl to 404.5 million bbl and were 22.2 
million bbl, or 5.2%, below the same week last year.




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