Mixed Signals on Middle East Conflict Weigh on Oil Prices


   
Maria Eugenia Garcia
DTN Energy Editor

   HOUSTON, TX (DTN) --Oil crude futures droppedl on Monday (10/26) as market 
participants weighed mixed signals on the Middle East conflict, including 
reports of diplomatic efforts by senior officials from Saudi Araby, Pakistan 
and Turkey who met with Iran to seek peace, while U.S. President Donald Trump 
threatened to renew attacks on Iran. 

   According to media reports, the newly-formed Mecca Alliance, comprising  
Saudi Arabia, Pakistani and Turkish, met with Iranian officials on Monday, with 
the parties agreeing to continue talks aimed at preventing further escalation 
of tensions in the Middle East. 

   However, U.S. president Donald Trump on Sunday (10/26) said that he was 
still deciding whether to pursue an agreement with Iran or take action to 
"finish them off."

   The front-month ICE Brent dropped $1.90 to $115.947 bbl, while the NYMEX WTI 
futures contract for December delivery fell $1.44 to $101.82 bbl.

   Downstream, ultra-low sulfur diesel (ULSD) futures reversed gains recorded 
in the morning and the front-month NYMEX ULSD settled at $4.9120 gallon, down 
$0.0789 from Friday (10/23), after hitting a session high of $5.0438. 

   In contrast, the NYMEX RBOB futures for December delivery increased $0.0369 
to $3.2485 gallon.

   The U.S.  dollar index strengthened 0.187 points to 101.84 against a basket 
of foreign currencies.

   This week,  traders will closely monitor Federal Reserve Open Committee 
meeting scheduled for October 28.  The Federal Reserve raised U.S. interest 
rates by 25 basis points in September, bringing key U.S. lending rates to a 
3.75%- 4% range.

   It was the first monetary tightening in three years by the central bank, 
with analysts expecting it to hike rates further in the near term as it tries 
to combat rising inflation. The Fed's next rate decision will be in December.




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