Written Commentary
CRUDE OIL
June Crude Oil was higher early Monday but inside the ranges from last Friday and Thursday. Prices were supported as the hoped-for peace talks between the US and Iran over the weekend did not happen. Iran reportedly gave the US a new proposal on reopening the Strait of Hormuz and the ending of the war that postpone nuclear negotiations postponed for a later stage, and this was apparently rejected by the Trump administration. Israel continued its strikes on Lebanon over the weekend, so the cease-fire there does not appear to be holding. The reopening of the strait seems no closer than it did a week ago, and the longer the closure persists, the more dire the supply situation appears.
PRODUCTS
June RBOB reached a new contract high early Monday, while June ULSD failed to take out its high from earlier this month. There may be some improvement in diesel and jet fuel supply to Asia, with Reuters reporting that refiners in South Korea and Taiwan have sold more cargoes for loading in May than in April, though the volume remained well below pre-war levels.
NATURAL GAS
June Natural Gas was higher early Monday after trading to its lowest level since 2021 on Friday. The nearby contract fell to its lowest level since October 2024 last week. The 6-10 and 8-14 day maps show a below normal temperatures over the eastern half to two-thirds of the lower 48 states, but at this time of year, a cooler weather pattern does not necessarily bring a sharp boost in demand. On the other hand, US production has slowed, modestly.
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