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Update: WTI Oil Plunges to a Month Low on Expectations the War on Iran is Nearing an End

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West Texas Intermediate (WTI) crude oil plunged 5.6% on Wednesday on expectations the United States and Iran are nearing a deal to reopen the Strait of Hormuz and end the largest-ever energy supply shock.

WTI crude oil for July delivery closed down US$5.21 to settle at US$88.68 per barrel, the lowest since April 20, while July Brent oil was last seen down US$5.30 to US$94.28.

The drop comes as United States and Iran continue negotiations to end their war and reopen the crucial waterway that is the chokepoint for the 20% of daily oil supply from Persian Gulf nations that has been closed since the Feb. 28 start to the war.

Talks between the two countries are continuing in Qatar and U.S. President Trump has repeatedly said a deal is near. Reuters reported Iranian State TV is saying it has seen a draft of "an initial, unofficial framework" for a peace agreement that sees the withdrawal of U.S. forces in the region while Iran and Oman will jointly managing shipping through the Strait.

Though oil prices have retreated from April highs above US$110 per barrel, there is little expectations prices will quickly return to pre-war levels as importers look to rebuild inventories.

"Even if a deal is reached, market normalization is likely to take months, with ongoing demand for replacement barrels and depleted inventories potentially leading to a higher price floor than the one seen before the war," Saxo Bank noted.

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July WTI Crude Oil Contract Closes Down US$5.21; Settles at US$88.68 per Barrel

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Update: Gold Trading at a Two-Month Low Even as Falling Oil Prices Ease Inflation Concerns

(Updates prices.)Gold fell to a two-month low early on Wednesday, even as the dollar dipped as oil prices weakened ahead of an expected deal to end the war on Iran, easing inflation worries.Gold for July delivery was last seen down US$52.6 to US$4,482.40 per ounce, the lowest since March 26.The precious metal has remained well below its Jan. 28 record high as investors turned to the dollar as oil prices surged after the United States and Israel attacked Iran, which responded by blocking the Strait of Hormuz, the chokepoint for a fifth of daily oil demand supplied by Persian Gulf nations.However oil prices have retreated from four-year highs touched last month on expectations Iran and the United States will soon end hostilities amid talks in Qatar and reopen the Strait, easing the inflation worries that have supported the dollar and pushed up treasury yields, both bearish for gold."Gold fell alongside US bond yields on Tuesday as the prospect of a Middle East peace deal weighed on oil prices, thereby easing inflation concerns. In addition, a powerful global equity rally, led by chipmakers, has reduced near-term demand for defensive assets such as gold," Saxo Bank noted.The dollar edged higher, with the ICE dollar index last seen up 0.08 points to 98.24. Treasury yields edged down, with the U.S. two-year note last seen paying 4.045%, down 0.1 basis points, while the yield on the 10-year note was down 0.4 points to 4.489%.

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Sector Update: Financial Stocks Decline Wednesday Afternoon

Financial stocks fell in Wednesday afternoon trading with the NYSE Financial Index declining 0.7% and the State Street Financial Select Sector SPDR ETF (XLF) shedding 0.8%.The Philadelphia Housing Index rose 1.5%, and the State Street Real Estate Select Sector SPDR ETF (XLRE) gained 0.1%.Bitcoin (BTC-USD) fell 1.6% to $74,905, and the yield for 10-year US Treasuries was little changed at 4.49%.In economic news, Redbook US same-store sales last week jumped 9% from a year earlier after an 8.1% gain in the prior week.The Dallas Federal Reserve's monthly general business services index improved to minus 7.7 in May from minus 9.9 in April, versus the expected minus 6.0.The Richmond Fed's monthly manufacturing index rose to 13 in May from 3 in April, more than the 4 estimate in a Bloomberg survey.In corporate news, JPMorgan Chase (JPM) CEO Jamie Dimon said at a conference that acquisition opportunities may emerge in the next couple of years. "We have great businesses and we want to continue to build them," Dimon said, according to a transcript. "But I do think there might be in the next couple of years a chance to put $10 billion or $20 billion to work buying something." JPMorgan shares fell 3%.Robinhood (HOOD) is launching Agentic Trading and Agentic Credit Card, new tools that let users deploy AI agents to trade and make credit purchases on their behalf. The shares rose 1.9%.Carlyle (CG) introduced a middle-market aerospace, defense, and industrial investment platform focusing on deals in the US and Europe. The shares rose 0.5%.

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