Written Commentary
CRUDE OIL
June Crude Oil sold off sharply after Iran’s foreign minister said that the passage for all commercial vessels through the Strait of Hormuz was open for the remaining ceasefire period. This came after the ceasefire between Israel and Lebanon went into effect. Reiterated the news but said that the US blockade against Iranian ships will continue until a peace agreement with Iran is reached. Overnight he said a deal to end the war could be reached soon. A Pakistani source told Reuters that there was progress in backdoor diplomacy and that an upcoming meeting between the two sides could result in the signing of a memorandum of understanding, followed by a comprehensive deal within 60 days. The head of the International Energy Agency head said it will take about two years to recover the energy output lost from the Iran war.
PRODUCTS
The report that the Strait of Hormuz was “open for business” sparked quick reversals lower in gasoline and diesel.
NATURAL GAS
June Natural Gas was near unchanged in the wake of the announcement that the Strait of Hormuz was open and was holding its lows from earlier this week. If anything the drop in crude oil prices in the wake of the announcement could be viewed as supportive to natural gas, as it lowers the incentive for US crude oil producers and natural gas is often a byproduct. The 6-10-day map shows warmer than normal temperatures across most of the lower 48 states, from the PNW and Rockies to the east coast, with the southwest and northeast seeing normal to below normal conditions. However, a cooler pattern emerges in the 8-14 day in the middle of the nation.
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