U.S. oil pulls back below $83 as more crude shipments arrive after delays due to Red Sea disruption

U.S. crude oil fell back below $83 a barrel on Wednesday after rallying nearly 2% in the prior session.

Traders are waiting for the latest U.S. petroleum inventory data with the market’s focus shifting back to supply and demand fundamentals as the threat of war between Israel and Iran has faded.

Here are the latest energy prices:

• West Texas Intermediate June contract: $82.99 a barrel, down 37 cents, or 0.44%. Year to date, U.S. crude oil is up more than 15%.
• Brent June contract: $87.14 a barrel, down 28 cents, or 0.32%. Year to date, the global benchmark is up about 14%.
• RBOB Gasoline May contract: $2.72 a gallon, down 0.1%. Year to date, gasoline futures are up more than 29%.
• Natural Gas May contract: $1.78 per thousand cubic feet, down 1.6%. Year to date, natural gas is down about 29%.

The U.S. Senate passed a foreign aid package that would expand sanctions against Iranian oil and target ports, vessels and refineries that knowingly accept the Islamic Republic’s crude exports.

Under the legislation, President Joe Biden can waive the sanctions for national security reasons, likely limiting their impact on the oil market.

“We maintain our view that the Biden administration has no intention of strictly enforcing sanctions that could drive up global crude prices (and, as a result, US retail gasoline prices) in an election year,” the geopolitical risk service Rapidan Energy told clients in a note before the legislation passed.

A prolonged rally above $95 a barrel for global benchmark Brent is unlikely at the current moment, said Tamas Varga, analyst at oil broker PVM.

The flow of oil from the Middle East has not been interrupted by conflict, production is growing in the U.S., inflation remains stubborn, and OPEC has ample spare capacity to roll back on the market in the event of a supply emergency, Varga said.

“It is fair to conclude that the last two on the list played the most prominent roles in bringing the price of Brent down from $92/bbl less than two weeks ago to below $86/bbl on Monday,” the analyst told clients in a note Wednesday.