Oil Prices Retreat From 1-Week Highs on U.S.-Iran Talks


   
Karim Bastati
DTN Analyst

   VIENNA (DTN) -- Oil prices slid Friday (9/25) morning on revived 
negotiations between the U.S. and Iran in New York. The talks marked the first 
time diplomats from Tehran and Washington met directly since June, sparking 
market optimism about a deal that could reopen the Strait of Hormuz.

   By 09:15am ET, ICE Brent for November delivery was down $1.66 to trade near 
$104.94 bbl, and NYMEX WTI for November delivery fell $1.89 to $92.72 bbl.

   Downstream, NYMEX ULSD for October delivery edged lower by $0.0152 to 
$4.7151 gallon, and front-month RBOB futures retreated $0.1554 to $3.4092 
gallon.

   The US dollar index softened by 0.305 points to 100.715 against a basket of 
foreign currencies.

   U.S.-Iranian negotiations have this week reportedly entered their 
exploratory phase after a three-month long period of exchanging messages via 
Pakistani mediators that followed the expiry of a de jure 60-day ceasefire.

   The White House, meanwhile, denied rumors that the administration was 
considering a temporary ban on diesel exports. Fears of an export ban, sparked 
by comments made by U.S. President Donald Trump on Wednesday, propelled oil 
prices to their highest in a week and led to a rally in European gasoil futures.

   Elsewhere, Saudi Aramco announced that it had restarted its East-West 
pipeline at reduced flow rates following a two-week shutdown. Ship tracking 
data showed that loading operations at the Red Sea port of Yanbu were still 
idle. The country has in response to the loss of its central workaround to the 
blockade of the Strait of Hormuz all but maximized oil shuttling operations in 
the Gulf of Oman.

   Increased ship-to-ship transfers, the quick restoration of some pipeline 
flows, and revived truce hopes put most oil futures on track for weekly 
declines. As of Friday morning, WTI's front-month contract was down 7.5% on the 
week, and ULSD was eyeing a more than 8% week-on-week drop. Only Brent futures 
continued to hold on to earlier gains, currently up less than 1%.

    




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