Oil Futures Volatility Returns
by Bloomberg | Will Kubzansky
click here to read this article at Rigzone.com
*this article was not written by Roseland Oil & Gas
Crude markets swung lower despite ongoing supply disruptions.
Oil fell in a choppy trading session, with US President Donald Trump vowing a response to the downing of an American military helicopter, reigniting fears of a return to clashes with Iran that could prolong a global energy crisis.
Brent crude oil, the global benchmark, declined 3% to settle above $91 a barrel, while West Texas Intermediate fell 3% to settle above $88 a barrel.
Trump blamed Iran for shooting down the Apache helicopter off Oman, prompting concern over the stability of a shaky ceasefire and the fate of negotiations for a peace deal with Tehran. The conflict, which began in late February, has ushered in the biggest oil supply disruption in history and fueled global inflation.
“It just shows we are not as close to a deal as headlines might suggest,” said Ryan McKay, senior commodity strategist at TD Securities.
Still, Trump did not specify what the response would look like, and the ceasefire has so far withstood multiple clashes between the warring sides, as well as fighting between Israel and Iran. Iran’s foreign minister posted on social media that “foreign forces in proximity to our territory are at constant risk.”
The rhetoric disrupted steadily declining prices earlier in the session on growing signs that demand is plunging to counter supply losses from the effective closure of the Strait of Hormuz, the vital energy shipping route.
China’s purchases of oil from overseas fell about 7.8 million barrels a day last month to the lowest in more than eight years. That represents a slump of almost 4 million barrels a day when compared with the average over 2025.
The plunge in buying by the world’s largest crude importer – coupled with record US exports and emergency reserve releases – has provided much-needed relief for global oil supplies. While oil is trading well above prewar levels, it’s far below peaks seen in recent months as the war choked off flows of crude, fuels and natural gas to the world.
There have also been signs that flows through Hormuz, which have been cut off by a double blockade maintained by Tehran and Washington, may be picking up. Kuwait offered crude oil to Asian refiners, an indication that flows through the key chokepoint are resuming.
But the full resumption of normal oil flows remains far off, even if the two sides eventually reach a deal. Among them, mines in Hormuz must be removed, shut-in fields may take months to restart, and damage to energy infrastructure from drone and missile strikes needs to be repaired.
“Crude gave us another roller coaster ride today which served-once again-as a stark reminder to avoid trading the headlines,” said Mark Malek, chief investment officer at Muriel Siebert & Co. “Keep a box of Dramamine on your desk-the motion sickness is likely to continue.”
Oil Prices
- WTI for July delivery fell 3.4% to settle at $88.20 a barrel.
- Brent for August settlement dropped 3% to settle at $91.45 a barrel.
by Bloomberg | Will Kubzansky
click here to read this article at Rigzone.com
*this article was not written by Roseland Oil & Gas