Recap: The oil market on Friday continued to trade within Wednesday’s volatile trading range, ending the session higher as the market weighed the news of renewed U.S.-Iran hostilities against President Donald Trump’s statement that the ceasefire was still in effect. The crude market gapped higher on the opening from $97.99 to $98.25 and posted a high of $98.64 following Iran’s accusations that the U.S. violated their ceasefire, while the U.S. said its strikes were retaliatory after Iran fired on U.S. Navy vessels transiting the Strait of Hormuz on Thursday. However, the market quickly backfilled its gap as it erased some of its initial gains after President Trump said the ceasefire was still continuing. The market remained under pressure as it awaited for Iran’s response to the U.S. peace proposal after U.S. Secretary of State, Marco Rubio, said the U.S. should get a response from Iran later on Friday. The crude market traded to a low of $93.82 in early morning trading before it retraced some of its losses and held some resistance just above the $96 level for much of the session. The June WTI contract settled up 61 cents at $95.42 and the July Brent contract settled up $1.23 at $101.29. The product markets ended the session higher, with the heating oil market settling up 8.25 cents at $3.8991 and the RB market settling up 7.07 cents at $3.5267.
Technical Analysis: The crude market is seen remaining in its recent trading range as the market awaits to see whether Iran will agree to the U.S. peace proposal and whether the ceasefire will continue to hold despite the renewed clashes between the U.S. and Iran. The market’s losses will remain limited as long as the standoff over the Strait of Hormuz continues. The oil market is seen finding resistance at $98.64, $99.80, $102.42, $102.70, $105.48, $107.46 and $110.93. Meanwhile, support is seen at $93.82, $89.85, $88.66, $87.64, $85.50, $85.45, $80.56, $78.97 and $73.56.
Fundamental News: Barclays maintained its $100/barrel Brent forecast for 2026 with risks skewed higher. It said that even in the most optimistic scenario, oil prices are probably too low as demand remains resilient and inventories continue to draw down fast.
Fitch Ratings raised its 2026-2027 oil price assumptions due to the longer than expected effective closure of the Strait of Hormuz amid the Iran conflict. They are now based on an assumption the strait will begin reopening around July. Fitch expects Brent crude to remain at $100-$110/barrel in May-July before falling to $70/barrel by September. It said OPEC is likely to produce up to its maximum capacity to offset volumes lost due to the Hormuz closure.
Baker Hughes reported that U.S. energy firms this week added oil and natural gas rigs for a third consecutive week, the first three-week streak of increases since early February. The oil and gas rig count increased by one to 548 in the week ending May 8th, its highest level since early April. Baker Hughes said oil rigs increased by two to 410 this week, their highest level since mid-April, while gas rigs fell by one to 129, their lowest level since late April, and other miscellaneous rigs held steady at nine.
IIR Energy said U.S. oil refiners are expected to shut in about 599,000 bpd of capacity in the week ending May 8th, increasing available refining capacity by 271,000 bpd from the previous week. Offline capacity is expected to fall to 334,000 bpd in the week ending May 15th.
Exxon Mobil reported a leak of sulfur dioxide gas at its 264,000 bpd Joliet, Illinois refinery.
Delek reported emission from a fluid catalytic cracking unit regenerator vent at its 73,000 bpd Big Spring, Texas refinery.
Early Market Call – as of 8:40 AM EDT
WTI – June $97.55, up $2.87
RBOB – June $3.5904, up 6.94 cents
HO – June $3.9519, up 6.8 cents
