Oil Dips on Profit-Taking, Contract Roll Activity


   
Barani Krishnan
DTN Refined Fuels Market Reporter

   SECAUCUS, NJ (DTN) -- Crude and refined product futures fell Thursday (7/30) 
as market participants managed front-month contract expiration pressures while 
engaging in profit-taking following the prior session's large gains.

   Despite a bullish crude drawdown of 7.2 million bbl reported by the U.S. 
Energy Information Administration on Wednesday (7/29) for the week ended July 
24, energy futures yielded to technical selling pressure amid diplomatic 
efforts to resolve the U.S.-Iran standoff over the Strait of Hormuz.

   Selling was further amplified by roll activity and options pinning as the 
front-month August refined product and Brent contracts approach month-end 
expiration.

   NYMEX WTI for September delivery settled down $0.87, or 1%, at $83.59 bbl, 
after rising almost 7% on Wednesday. ICE Brent for September delivery closed 
down $1.71, or 1.9%, at 89.03 bbl, following the prior session's 8% gain that 
drove it above $90 bbl.

   Downstream, fuel derivatives on NYMEX faced steeper percentage declines 
ahead contract expiration Thursday (7/31).

   In diesel, August NYMEX ULSD eased $0.1607 to $ 4.2094 gallon, while the 
more-actively traded September contract dropped $0.1066 to $ 4.1291 gallon.

   In gasoline, August NYMEX RBOB eased $0.6933 to $ 3.2847 gallon, while 
September RBOB slid $0.0945 to $ 3.1313 gallon.

   The downside in prices was, however, limited by shipping data showing 
severely depressed tanker traffic on the Strait of Hormuz. An Iranian drone 
strike on an LNG tanker in the Red Sea heightened security risks for 
alternative trade routes.

   Away from the Middle East, Kazakh crude exports via the Black Sea port of 
Novorossiysk were halted too, following Ukrainian attacks on tankers that lift 
crude from a pipeline terminal moving 1.2 to 1.4 million bpd to international 
markets.




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