Recap: The crude market on Tuesday posted an inside trading day after U.S. President Donald Trump said on Monday that he paused a planned attack on Iran that had been planned for Tuesday to allow for negotiations to end the war. However, President Trump said the U.S. was ready to resume attacks if a deal is not reached, which limited the market’s losses. The oil market posted a low of $106.76 on the opening and retraced some of its losses, posting a high of $109.24 by mid-morning. The market later settled in a sideways trading range during the remainder of the session. The June WTI contract settled down 89 cents at $107.77 and the July Brent contract settled 82 cents at $111.28. The oil market ended lower in light of comments made by Vice President JD Vance said the U.S. and Iran made progress in talks, with neither country wanting a resumption of military action. Meanwhile, the product markets ended the session in mixed territory, with the heating oil market settling up 4.8 cents at $4.1625 and the RB market settling down 6.45 cents at $3.6962.
Technical Analysis: The oil market will continue to trade sideways as the market weighs the news of the U.S. and Iran making progress in talks to reach a peace deal against the statement that the U.S. was ready to resume attacks if a deal is not reached. However, the market will likely remain on the higher portion of its recent trading range as a significant amount of oil remains offline amid the continuing blockade of the Strait of Hormuz. Crude oil is seen finding resistance at $109.24, $109.47, $110.93, $117.63 and $119.48. Meanwhile, support is seen at $106.76, $102.65, $101.48, $100.68, $99.39, $99.07, $98.00, $96.61, $96.13 and $93.82.
Fundamental News: The Trump administration imposed sanctions on an Iranian foreign currency exchange house and what it said were front companies overseeing transactions on behalf of Iranian banks as the U.S. maintains pressure on Tehran. The Treasury Department imposed sanctions on the Iran-based Amin Exchange, also known as Ebrahimi and Associates Partnership Company, which it said has a widespread network of front companies spanning multiple jurisdictions, including in the United Arab Emirates, Turkey, and Hong Kong. The U.S. also blocked 19 vessels it said were involved in shipping Iranian petroleum and petrochemicals to foreign customers.
Qatar’s Foreign Ministry spokesperson said there were no special arrangements in place for the export of energy products, but that the closure of the Strait of Hormuz had added complexity to supply chains in the region.
Saudi state media reported that Saudi Ports Authority Mawani has launched the “Red Sea Express” shipping service at King Fahd Industrial Port in Yanbu, to speed up cargo handling, cut waiting times, and increase logistics efficiency at the port. The service links the ports of Jeddah, Yanbu, Ain Sokhna in Egypt, and Aqaba in Jordan. King Fahd Industrial Port, in Yanbu on the Red Sea coast, is one of the largest ports for loading crude oil and petrochemicals in the Red Sea. Saudi Arabia has increased shipments through Yanbu to offset a near-halt to traffic through the Strait of Hormuz during the Iran war.
According to BloombergNEF, U.S. diesel prices have increased more sharply than gasoline, passing $5.60/gallon last week, 20 cents shy of a 2022 peak. It said the increased price of diesel makes a compelling business case for electric trucks, in a market now boosted by the first large-scale production of Tesla Inc.’s Semi offering.
Early Market Call – as of 9:00 AM EDT
WTI – June $101.96, down $2.07
RBOB – June $3.6192, down 5.05 cents
HO – June $4.0805, down 7.08 cents
