Oil Up 3rd Straight Day on Iran Tensions, U.S. Inventories


   
Barani Krishnan
DTN Refined Fuels Market Reporter

   SECAUCUS, NJ (DTN) -- Crude and product futures rose for a third straight 
session Wednesday (6/3) morning on concerns that intensifying Middle East 
hostilities were stalling an imminent end to the Iran war and reopening of the 
Strait of Hormuz, which is crucial to energy shipments.

   Market momentum was also driven by expectations of another drop in domestic 
crude and fuel stockpiles to be announced by the U.S. Energy Information 
Administration (EIA) in inventory data due at 10:30 a.m. ET for the week ended 
May 29.  Crude stocks fell for a fifth consecutive week while distillate fuel 
inventories dropped to their lowest level since 2003 during the prior week to 
May 22.

   Ahead of the EIA data, the American Petroleum Institute's reading for 
domestic crude inventories showed a drop of 6.8 million bbl for the week ended 
May 29. Forecasts had called for a decline of only around 3.6 million bbl.

   By 9:10 a.m. ET, NYMEX WTI for July delivery was up $1.41 to $95.15 bbl, 
rising 1.5% after a 7% advance over the past two sessions.

   ICE Brent for August delivery rose by $1.41 to $97.41 bbl, adding 1.5% to 
the prior two-day rally of 4%.

   Among refined products, NYMEX ULSD futures for July delivery edged higher by 
$0.1004 to $3.7991 gallon, while July RBOB advanced $0.0166 to $3.1609 gallon.

   The US dollar index was higher by 0.251 points to 99.435 against a basket of 
foreign currencies.

   Renewed military exchanges between U.S. and Iranian forces near Hormuz 
chokepoint have effectively frozen recent diplomatic breakthrough hopes. 
Reports indicate Washington and Tehran have halted direct communications 
despite ongoing claims of active negotiations.

   Kuwaiti air defenses intercepted inbound Iranian missile attacks, while 
separate Israeli military operations continued pushing forward through southern 
Lebanon. Investors are aggressively tracking these escalating battlelines ahead 
of another scheduled round of regional talks.




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