Oil Ends Down Again as Iran, U.S. Officials Meet Over War


   
Barani Krishnan
DTN Refined Fuels Market Reporter

   SECAUCUS, NJ (DTN) -- Crude futures reversed a Tuesday (9/22) morning rally 
that took Brent to above $100 bbl, settling down a fifth straight session after 
U.S. and Iranian officials held talks over the war in the Middle East, with 
U.S. President Donald Trump describing it as a meeting that went "very well". 

   Oil prices also came under pressure as algorithmic trading programs and 
commercial desks liquidated prompt long positions while rolling contracts ahead 
of the October NYMEX WTI expiration.

   Speculation had swirled in recent days that Trump and Iranian President 
Masoud Pezeshkian could hold a summit meeting on the sidelines of the U.N. 
General Assembly in New York. The U.S. president addressed the assembly on 
Tuesday while his Iranian counterpart's speech is scheduled on Wednesday (9/23).

   Both WTI and Brent traded beneath $100 bbl earlier on Tuesday, responding to 
a senior Iranian official's comment to media that the U.N. podium in New York 
presented a "golden opportunity" for the U.S. to lift its naval blockade on 
Iranian cargoes and for Tehran to reciprocate by reopening the Hormuz.

   There was no word on whether the two leaders hold face-to-face talks at the 
event, the first being attended by Pezeshkian on U.S. soil since the earnest 
start of the Middle East war in March. The meeting on Tuesday was conducted by 
high-level officials, including Trump's son-in-law Jared Kushner and special 
U.S. envoy Steve Witkoff.

   "We will get it done and get it done fast," Trump told reporters when asked 
about the possibility of the White House reaching a deal to end the conflict 
with Iran. Earlier, in his speech to the U.S. assembly, Trump said he expected 
a deal with Iran soon after the U.S. midterm election on November 3. 

   NYMEX WTI crude for October delivery fell $1.19, or 1.24%, to settle at 
$94.59 bbl, after soaring to $97.42 during the session. 

   ICE Brent for November delivery moved down $1.09, or 1.09%, to settle at 
$99.25 bbl. The session high was $102.30. 

   Downstream, NYMEX ULSD for October delivery climbed $0.0388, or 0.82%, to 
finish at $4.9421 gallon. It peaked at $4.9578 for the day. 

   RBOB for October advanced $0.0203, or 0.57%, to end the session at $3.4875 
gallon. It reached $3.5567 earlier.

   By 3:19 p.m. ET, the U.S. dollar index gained 0.159 points to 100.315 
against a basket of currencies.

   Crude futures have lost more than $10 bbl over the past five sessions in 
anticipation that a prompt deal might end a war that has squeezed vessel 
movement on the Hormuz by more than 90% from pre-war levels. Tanker tracking 
services reported on Monday the passage of only two commodity-carrying vessels 
on the waterway, once transited by more than 100 ships per day carrying 20 
million bpd of petroleum liquids.

   Despite the market's focus on a potential breakthrough in the conflict, Bank 
of America raised this week its second-half Brent crude forecast, cautioning 
that prices could surge toward $150 bbl if Middle East hostilities escalate and 
transport bottlenecks persist. The bank emphasized that headline-driven relief 
rallies overlook critical structural deficits, as months of targeted 
infrastructure damage and vessel diversions have eroded spare operational 
capacity across major producing nations.

   Physical transit risks continue to heighten regional supply fears. Red Sea 
skirmishes threaten the Bab el-Mandeb Strait, while a pipeline blockade has cut 
output at Libya's Sharara field from 340,000 bpd to roughly 127,000 bpd. 
Meanwhile, potential extension of Russia's diesel export ban into October keeps 
distillate markets tight.

   Energy traders are also monitoring weekly supply metrics from the American 
Petroleum Institute, due at 4:30 p.m. ET today, ahead of official inventory 
numbers from the Energy Information Administration on Wednesday (9/23). For the 
week ended September 11, the API cited a 7.1 million bbl crude build, compared 
to the EIA's reported draw of 600,000 bbl.

   Consensus expectations point to a 500,000 bbl decline in EIA crude stocks 
for the week ended September 18.




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