Oil Tumbles 3% as Iran Focus Triggers Market Swings


   
Barani Krishnan
DTN Refined Fuels Market Reporter

   SECAUCUS, NJ (DTN) -- Crude to oil product futures tumbled about 3% in 
morning trade Thursday (2/5) as optimism that U.S.-Iran talks would avert war 
between the two sides scaled down risks to Middle Eastern energy supplies.

   The two countries announced on Wednesday (2/4) they would meet in Oman on 
Friday (2/6) to resume negotiations discontinued since June. The U.S. says it 
wants to dismantle Iran's nuclear program which it fears would enable the 
Islamic republic to assemble an atomic bomb one day to strike at Israel. The 
Iranian government denies the assertion.

   Oil prices have swung heavily in recent days amid saber rattling by the two 
sides in the run-up to the talks, including incidents involving their navies in 
the Persian Gulf, which provides passage to a fifth of the world's crude 
cargoes. In the latest escalation reported on Thursday, Iran seized two foreign 
oil tankers, according to the Associated Press, which cited state television as 
claiming that the vessels were smuggling fuel.

   The downside in oil prices was, however, limited by lower U.S. crude 
inventories over two consecutive weeks reported by the Energy Information 
Administration on Wednesday.  

   Commercial crude stocks dropped by 3.5 million bbl to 420.3 million during 
the week ended January 30, for the second consecutive week, said the EIA. The 
decline came in the aftermath of Winter Storm Fern, which led to production 
outages of approximately 2 million bpd in the Permian Basin in Texas and New 
Mexico.

   NYMEX WTI crude futures for March delivery were down $1.75, or 2.8%, to 
$63.39 bbl, after a 3% rise at Wednesday's close. ICE Brent crude for April 
delivery fell by $1.86, or 2.7%, to $67.60 bbl.

   ULSD futures for March slid by $0.0789 to $2.3911 gallon, and RBOB for March 
delivery eased by $0.0298 to $1.9354 gallon.

   The U.S. dollar index strengthened 0.101 points to 97.590 against a basket 
of foreign currencies.




(c) Copyright 2026 DTN, LLC. All rights reserved.