Recap: The oil market ended the session slightly higher following a shaky start to the session amid concerns over the economic outlook for the U.S. and China and expectations that oil demand could fall. The market gapped higher on the opening from $62.71 to $62.75 on the news that Israel’s military began activating troops in Gaza on Sunday as part of a larger ground operation. This followed earlier news that the Israeli military started launching strikes in the Gaza Strip and had bombed Houthi controlled ports of Yemen. The market, however, erased its gains and traded lower as the market focused on some negative economic news, with Moody’s downgrading the U.S. sovereign credit rating and China reporting that growth in industrial production slowed in April. The market posted a low of $61.57 and settled in a sideways trading range before it retraced its losses and posted a high of $63.40 in afternoon trading amid signs of a breakdown in U.S. talks with Iran over its nuclear program. Iran’s Deputy Foreign Minister said nuclear talks between Iran and the U.S. will lead nowhere if the U.S. insists that Iran stop its uranium enrichment activity. The crude market later settled in a sideways trading range during the remainder of the session, with the June WTI contract settling up 20 cents at $62.69 and the July Brent contract settled up 13 cents at $65.54. The product markets ended the session in negative territory, with the heating oil market settling down 1.29 cents at $2.1277 and the RB market settling down 30 points at $2.1388.
Technical Analysis: The crude market will continue to trend sideways as the market awaits for further developments on a possible meeting between Ukraine, Russia, the U.S., the European Union and Britain in an attempt to find an end to the war in Ukraine. The market will also remain focused on the U.S.-Iranian talks on its nuclear program. The market is seen finding support at its low of $61.57, $61.25, $60.47, $59.89, $59.68, $58.64, $57.74 and $57.03. Meanwhile, resistance is seen at $63.40, $63.68, $63.90-$63.92, $64.87, $65.29 and $66.41.
Fundamental News: Iran’s Deputy Foreign Minister, Majid Takhtravanchi, said nuclear talks between Iran and the United States “will lead nowhere” if Washington insists that Tehran drop its uranium enrichment activity to zero. On Sunday, U.S. special envoy Steve Witkoff reiterated Washington’s stance that any new deal between the U.S. and Iran must include an agreement not to enrich uranium, a possible pathway to developing nuclear bombs. Tehran says its nuclear energy program has entirely peaceful purposes.
U.S. President Donald Trump and Russia’s President Vladimir Putin spoke by telephone on Monday, the third officially announced call this year between the two leaders. Russia’s President Vladimir Putin said that efforts to end the war in Ukraine were on the right track and that Russia was ready to work with Ukraine on a memorandum about future peace accord. Russia’s President thanked President Trump for supporting the resumption of direct talks between Russia and Ukraine and said that President Trump noted Russia’s support for peace. He said if appropriate agreements are reached, then there could be a ceasefire.
IIR Energy said U.S. oil refiners are expected to shut in about 300,000 bpd of capacity in the week ending May 23rd, increasing available refining capacity by 462,000 bpd. Offline capacity is expected to fall to 228,000 bpd in the week ending May 30th.
Goldman Sachs said it is retaining a cautious outlook on oil prices, as pressure from likely elevated Iranian supply and higher OECD commercial inventories will offset support from stronger global GDP growth. The bank said “We are maintaining our Brent/WTI oil price forecasts of $60/56 for the remainder of 2025 and $56/52 in 2026.”
Early Market Call – as of 8:40 AM EDT
WTI – Jun $62.54, down 17 cents
RBOB – Jun $2.1360, down 41 points
HO – Jun $2.1279, down 5 points
