Oil Futures Lower Despite Morning Gains on Sanctions News


   
Miguel E. Andujar
DTN Refined Fuels Market Reporter

   

DAVENPORT, FL (DTN) ---- Oil futures ended lower Friday, giving back earlier 
gains despite bullish headlines around a new round of sanctions on Russian 
energy exports and persistent strength in the U.S. distillate market.

   Futures initially rose after the European Union agreed on new sanctions 
targeting Russian energy revenues, including a ban on fuel imports made from 
Russian crude and a dynamic price cap set 15% below market benchmarks. The 
measures, which also tighten restrictions on tankers involved in illicit 
Russian oil trade, aim to disrupt diesel flows refined from Russian crude by 
countries like India and Turkey that have been supplying Europe since the 
invasion of Ukraine.

   ULSD futures led the complex for much of the day, supported by tight U.S. 
distillate stocks and continued backwardation, with the front-month contract 
holding a $0.023 premium over the second month. The ULSD crack spread climbed 
above $36 bbl, the highest in 15 months, while the September ULSD contract 
briefly reached its highest level since the June 23 reversal. Gasoline lagged, 
as inventories remain near seasonal norms and implied demand has been sluggish.

   Adding to market uncertainty, President Donald Trump escalated trade 
tensions by demanding a minimum 15% to 20% tariff as part of any deal with the 
European Union.

   NYMEX WTI futures for August delivery fell $0.20 to settle at $67.34 bbl 
after trading as high as $68.45 bbl in early action. ICE Brent September 
futures declined by $0.24 to finish at $69.28 bbl.

   August ULSD futures ended down $0.0116 at $2.4530 gallon, after trading as 
high as $2.5939 gallon. The August RBOB gasoline futures settled down $0.0170 
at $2.1534 gallon.

   The U.S. Dollar Index weakened by 0.266 points to 98.18.




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