WTI Hits $73 as U.S.-Iran Deal Eases Supply Worries


   
Barani Krishnan
DTN Refined Fuels Market Reporter

   SECAUCUS, NJ (DTN) -- Crude futures extended their losses Thursday (6/18), 
slipping for a fifth time in six sessions, as a U.S.-Iran deal to end 
hostilities and restore shipping through the Strait of Hormuz triggered a broad 
selloff in oil, pushing prices to their lowest since the outbreak of the Middle 
East conflict.

   NYMEX WTI for July delivery settled down $0.19, or 0.3%, at $76.60 bbl after 
a 15-week low at $73.58.

   Since the end of April, WTI's front-month has unwound about 30% of its war 
premium that drove it to four-year peak of $119.48 bbl in March amid what the 
International Energy Agency called the most severe supply disruption in oil's 
history. Prior to U.S.-Israeli air strikes that began against Iran at 
end-February, WTI stood at around $67 bbl.

   August ICE Brent futures dropped by $0.30, or 0.4%, to close at $79.85 bbl, 
after a nearly four-month low at $76.54 bbl. Brent hovered at around $72 before 
the war.

   Downstream, NYMEX ULSD futures contract for July slid $0.0673 to settle at 
$3.1273 gallon after a session low at $3.0412. Diesel futures scaled above 
$4.70 gallon in May as blockades on the Hormuz caused by the war led to a 
squeeze in transportation fuels.

   Gasoline bucked Thursday's downtrend, with NYMEX gasoline for July rising 
$0.0853 to close at $2.9949.  Gasoline rallied above $3.76 at the height of the 
war-triggered fuel crisis.

   The U.S. Dollar Index returned to above its key 100-point pricing amid the 
de-escalation of risks in the Middle East, with the measure marked against a 
basket of major currencies rising by 0.734 points to 100.60.

   The pivot in energy pricing reflects swift repositioning by traders as the 
14-point memorandum of understanding (MoU) between the U.S. and Iran appeared 
to assure immediate toll-free transit through the Hormuz, which during normal 
times oversees the passage of 20 million bpd of petroleum liquids.

   The U.S. military announced Thursday it had officially lifted its naval 
blockade on all Iranian ports on the strait, although it will stay deployed in 
the region to monitor compliance with the MoU.

   Logistical projections from Goldman Sachs pointed to the likelihood of a 13 
million bpd surge in transit flows on Hormuz, enabling regional maritime 
exports to normalize fully by late July.

   While full domestic production recovery is slated for October, BNP Paribas 
said ongoing structural losses will establish a firm price floor near $75 bbl 
for Brent.

   Bearish demand sentiment intensified after PetroChina projected a 4.9% 
decline in China's 2026 crude oil consumption to approximately 5.52 billion bbl.

   Still, concerns over supply disruptions persisted following a Ukrainian 
drone attack that affected a major refinery near Moscow, highlighting continued 
risks to refining capacity.




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