WTI, Brent Crude Fall on Mideast Diplomatic Talks


   
Maria Eugenia Garcia
DTN Energy Editor

   HOUSTON, TX (DTN) --Oil crude futures fell on Monday (10/26) morning as 
Saudi, Pakistani and Turkish officials prepared to meet in Tehran for talks 
aimed at preventing a further escalation of tensions in the Middle East. 

   The diplomatic efforts followed comments from U.S. president Donald Trump on 
Sunday (10/26) that he was still deciding whether to pursue an agreement with 
Iran or tak action to "finish them off."

   Eight months into the Iran-Israel-U.S. conflict, vessel traffic through the 
Strait of Hormuz remained highly constrained, with just eight vessels 
transiting the key waterway in the last 24 hours, compared with an average 
daily rate of nearly 60 vessels, according to vessel tracking data. 

   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.

   In contrast, the NYMEX ULSD futures contract for November delivery rose 
$0.0130 to $4.9972 gallon, while front-month NYMEX RBOB futures increased g 
$0.0369 to $3.2485 gallon.

   The US dollar index climbed 0.222 points to 101.87 against a basket of 
foreign currencies.

   In domestic developments, the U.S. Department of Energy (DOE) authorized an 
emergency exchange of up to 400,000 bbl of crude oil from the Strategic 
Petroleum Reserve (SPR) to support operations at Phillips 66's 264,000-bpd Lake 
Charles refinery in Louisiana following a disruption to crude oil deliveries.

   The DOE said Friday (10/23) that the crude will be released from its West 
Hackberry SPR site in Louisiana for immediate delivery, helping the refinery 
maintain production of gasoline, diesel and other transportation fuels serving 
regional markets. 

   U.S. refineries have been running at high utilization rates and postponing 
winter to meet strong refined-product demand, particularly for diesel, as 
exports demand has been prioritized over domestic supplies. The U.S. Energy 
Information Administration reported last week that U.S. refinery utilization 
rose to 93.4% during the week ended October 16, up from 88.6% recorded the same 
week last year.  




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