Written Commentary
CRUDE OIL
August Crude Oil continued its selloff early Tuesday, falling to its lowest level since April 17. The memorandum of understanding between the US and Iran to end the war and reopen the Strait of Hormuz has apparently been signed, though full details have not been released. Iranian Foreign Minister said on Tuesday that Iran and the US would start a new round of talks in Switzerland on Friday to reach a final agreement after the start of an interim deal. Shippers are awaiting reassurance on safety to cross the strait, including the clearing of mines, which could take weeks.
PRODUCTS
Product prices followed crude oil lower early Tuesday, with diesel showing a bigger willingness to break lower. For the inventory reports this week, gasoline stocks are expected to be -1.4 million barrels for the week ending June 12, and distillates are expected to be -200,000.
NATURAL GAS
August Natural Gas has continued its choppy sideways pattern this week despite sharply lower prices in the crude oil sector on expectations that the Strait of Hormuz will be reopened. Reopening of the strait would allow Qatar to resume LNG exports, but full production restoration will take some time due to the damage to processing facilities from Iranian attacks.
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