Oil Extends Decline on Cooling U.S.-Iran Escalation Risks


   
Karim Bastati
DTN Analyst

   VIENNA (DTN) -- Oil prices continued to slide Monday (11/9) morning after 
U.S. President Donald Trump on the weekend said he was "highly unlikely" to 
order new attacks on Iran as long as negotiations progressed.

   By 09:00am ET, ICE Brent for January delivery was down $4.57 to trade near 
$93.75 bbl, and NYMEX WTI for December delivery fell $3.95 to $86.88 bbl.

   Downstream, NYMEX ULSD for December delivery slid $0.0821 to $4.2496 gallon, 
and front-month RBOB futures retreated $0.0817 to $2.695 gallon.

   The US dollar index softened by 0.505 points to 101.675 against a basket of 
foreign currencies.

   Crude oil futures plummeted by more than 10% last week in reaction to last 
week's U.S. midterm elections, in which Republicans lost majority control of 
both chambers of Congress, lowering risks of a renewed military escalation in 
the U.S.-Iran war. The President's latest comments, which represented a U-turn 
from his pre-election statements, added to bearish sentiment which was largely 
based on hopes of a dovish policy turn by a new weakened White House. Prices 
climbed to the highest since May in the run-up to the election on growing signs 
the U.S. may launch fresh attacks on Iran after November 3.

   Some signs of diplomatic progress, however, have recently begun to emerge. A 
Qatari delegation is set to submit Tehran's latest proposal in person on 
Monday, but both Doha and Washington were quick to dampen hopes of an imminent 
breakthrough, emphasizing that negotiations were still ongoing.

   Supply risks to Middle Eastern crude oil and fuels exports, meanwhile, 
persisted, with Yemen-based Houthis launching fresh strikes on Saudi Arabia 
over the weekend and independent maritime safety watchdogs reporting of several 
damaged tankers in the Strait of Hormuz.

   This week, market participants will be on the lookout for the latest U.S. 
inflation data as well as for updates to some of the most impactful oil market 
forecasts. The U.S. Energy Information Administration's latest Short-Term 
Energy Outlook is scheduled for release on Tuesday, followed by OPEC's Oil 
Market Report on Wednesday and the International Energy Agency's November Oil 
Report on Friday.




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