Oil Rises Again on Mideast Peace Skepticism


   
Barani Krishnan
DTN Refined Fuels Market Reporter

   SECAUCUS, NJ (DTN) -- Crude and refined product futures extended their rally 
for a second consecutive session Tuesday (6/2) afternoon, reversing morning 
declines, as initial optimism over a Middle East ceasefire gave way to 
persistent supply anxieties.

   By 2:00 p.m. ET, NYMEX WTI for July delivery was up $1.59 to $93.75 bbl, 
rising 1.7% on the day to extend Monday's (6/1) climb of 5.5%.

   ICE Brent for August delivery rose by $1.14 to $96.12 bbl, adding 1.2% to 
the prior session's rally of 3.2%.

   Among refined products, NYMEX ULSD futures for July delivery edged higher by 
$0.0742 to $3.7138 gallon, while July RBOB advanced $0.0638 to $3.1485 gallon. 

   The US dollar index was higher by 0.098 points to 99.245 against a basket of 
foreign currencies.

   Market participants bought the morning dip, concluding that a sustainable 
deal to end the regional conflict and reopen the blocked Strait of Hormuz 
remains elusive despite continuous diplomatic posturing.

   The intraday turnaround highlights the deeply conflicting domestic political 
imperatives driving the primary actors, a reality that quickly overshadowed 
Washington's bullish peace timeline. U.S. President Donald Trump aggressively 
pushes for an immediate end to hostilities to curb energy-driven inflation and 
secure a landmark foreign policy triumph. Conversely, Israeli Prime Minister 
Benjamin Netanyahu faces intense internal pressure to prolong the military 
campaign to preserve his fragile hardline governing coalition and stall 
unresolved domestic corruption charges.

   Friction between the two leaders became explicit following leaked details of 
a contentious Monday (6/1) phone call, where Trump reportedly rebuked Netanyahu 
for expanded military operations against Iran's ally Hezbollah in Lebanon that 
threaten delicate U.S.-Iran negotiations.

   With Netanyahu openly contradicting premature ceasefire declarations and 
Iranian media signaling a freeze in indirect diplomatic channels, the market 
quickly refocused on structural deficits. The physical backdrop remains 
exceptionally tight, with nearly 20% of global seaborne oil cut off for over 
three months and domestic distillate inventories languishing at 23-year lows.

   The afternoon was further supported by market expectations of another 
substantial drawdown in domestic petroleum stocks ahead of the weekly inventory 
reports. The American Petroleum Institute will issue at 4:30 p.m. ET today 
inventory estimates for the week ended May 29, followed by official figures for 
the same week from the Energy Information Administration on Wednesday (6/3).




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