Energy Markets Daily

Strait of Hormuz Centrality

Monday, May 25, 2026. CRUDE OIL: WTI opened week at $92.04, down 4.72% from Friday's close of $96.60. Drop driven by negotiations advancing toward potential short-term agreement on Strait of Hormuz reopening. Week recap: May 22 open $98, close $96.60; May 21 open $98.95, close $96.35; May 20 open $104.12, close $98.26; May 24 close $92.13. Trend clear: crude pricing in de-escalation. Trump stated agreement "has been largely negotiated, subject to finalization," explicitly linking it to Strait reopening. Indicated willingness to wait a few days for "right answer" while keeping pressure in place. KEY LEVELS: Support $90, below that $85. Resistance $95, above that $100. SETUP: If deal announced, expect break below $90, target $80-$85. If talks collapse, back to $100+. NATURAL GAS: Henry Hub spot prices falling. May 1 $2.66, May 8 $2.74, May 15 $2.86, May 22 $2.91. CME futures trading $3.00-$3.03, July contract $3.034. Pressure from cooler U.S. weather forecasts reducing AC demand, record-high production, soft fundamentals. SETUP: Support $2.85, resistance $3.10, range-bound for now. GEOPOLITICS: Trump says agreement largely negotiated, Strait reopening central. Iran floated proposals via Pakistan: reopening strait, sanctions relief, frozen assets release, US force withdrawal, 30-day nuclear talks window. Remaining hurdles: Iran's enriched uranium stockpile, nuclear enrichment limits, strait control/security arrangements. Both sides rejected elements of other's proposals. No final deal confirmed yet, but Trump signaling imminent announcements. BOTTOM LINE: Crude pricing in deal. If happens, expect $80-$85 targets. If doesn't, back to $100+. Gas soft, weather cooler, production high, prices stable. Capital preservation first.

Weekly Recap: Week 21

Friday, May 22, 2026. CRUDE OIL RECAP: Mon $108.66 (+3%), Tue $107.77 (-0.82%), Wed $98.26 (-8.82% sharp drop on peace deal progress), Thu $97.73 (-0.54%), Fri $98.30 (+0.58%). Weekly range $96-$109, volatile mid-week plunge followed by partial recovery. Crude tumbled May 20 on reports of progress toward US-Iran peace deal that could reopen Strait of Hormuz; prices stabilized as negotiations remained fluid. Technical: Rebound from April lows near $79, golden cross forming on longer-term moving averages, warnings of potential corrections toward $95-$100 support. Volatility: Continued noisy trading, wide possible range $80 floor to $120 ceiling depending on de-escalation or further disruptions. Year-over-year: Prices remain elevated but face downward pressure from potential resolution of conflicts. NATURAL GAS RECAP: Storage report May 21 showed 101 Bcf injection for week ending May 15 (33 Bcf above year-ago, 149 Bcf above five-year average). Working gas reached 2,391 Bcf, well-supplied heading into summer, expectations for above-average injections through October. Henry Hub futures near $2.99-$3.01, seasonal lull, mild weather supporting storage refills, LNG maintenance suppressing near-term demand. Production ~106-109 Bcf/d, Mexican exports steady near 7 Bcf/d. GEOPOLITICS: Incremental progress toward preliminary one-page MOU between US and Iran, but stalled on core issues (Strait of Hormuz reopening, Iran's nuclear program). Iran's approach: End war within 30 days, mutual non-aggression, lift US blockade for Strait reopening, war reparations, US force withdrawal, nuclear issues deferred. US rejected Iranian control over strait or insufficient nuclear concessions. Trump cited great progress, very good chance of deal, threatened to resume strikes if needed. Iranian officials warned against returning to war. Obstacles: Disputes over sequencing, Iran's enrichment levels, verification, whether Iran can impose fees/maintain control over strait. BOTTOM LINE: Crude fell $108.66 to $98.30 on de-escalation hopes. If deal materializes, expect further downside toward $85-$90. If talks collapse, back to $110+. Gas well-supplied, storage builds large, demand soft, prices stable. Capital preservation first.

Gulf States Pressing Trump

Thursday, May 21, 2026. CRUDE OIL: EIA report (May 20, week ending May 15) bullish. U.S. commercial crude inventories fell 7.86M barrels to 445M barrels (2% below five-year average). Refinery crude inputs averaged 16.3M b/d (down 80K b/d from prior week), utilization 91.6% of operable capacity. Motor gasoline inventories down 1.5M barrels (5% below five-year average). Distillate fuel inventories up 0.4M barrels (9% below five-year average). Total commercial petroleum inventories declined 9M barrels week-over-week. Crude oil imports averaged 6M b/d (up 116K b/d from prior week). WTI spot price May 15: $108.99/bbl (up $10.12 from prior week, up $45.15 year-over-year). May 21: WTI trading near $99/bbl (down from recent highs) amid easing geopolitical tensions. NATURAL GAS: Storage report today 10:30 AM ET. Last week: Working gas 2,290 Bcf (51 Bcf above year-ago, 140 Bcf above five-year average). Analysts expect 96 Bcf build (range 85-100 Bcf). Henry Hub June contract $2.86-$2.88, soft fundamentals, above-average storage, LNG maintenance suppressing demand. GEOPOLITICS: VP Vance said talks with Iran have seen substantial advancement. Trump paused planned Tuesday strike at request of Gulf leaders due to "serious negotiations." Iran coordinated passage of 26 vessels through Strait in past 24 hours, asserting continued control despite US naval blockade. US and Iranian officials reportedly close to one-page MOU that would formally end current phase of conflict, launch 30 days of detailed talks on sanctions relief, nuclear curbs, Strait transit rules. Iran reviewing US draft ending war while leaving core issues for follow-on negotiations. Gulf states pressing Trump to prioritize negotiations over strikes. Crude pulled back from $108.99 to $99 on easing tensions. If deal materializes, expect further downside toward $85-$90. If talks collapse, back to $110+. Gas in holding pattern, storage builds large, demand soft, prices stable. Capital preservation first.

US Wants Free Commerce

Wednesday, May 20, 2026. EIA Weekly Petroleum Status Report drops 10:30 AM ET, covering week ended May 15. Previous report (May 13): U.S. commercial crude inventories fell 4.306M barrels to 452.9M barrels for week ended May 8, exceeding analyst forecasts of ~2.0-2.1M barrel draw (bullish signal, tighter supplies). EIA Short-Term Energy Outlook projects large global oil inventory draws averaging 8.5M barrels/day in Q2 2026 due to Middle East supply disruptions. If today's report shows another draw, crude stays bid; if build, profit-taking possible. Brent expected to average ~$106/bbl in May-June 2026, WTI tracks Brent at discount. EIA now sees 2026 Brent averaging $95, WTI mid-$80s (both revised higher due to geopolitical risk). NATURAL GAS: Storage report Thursday. Working gas in storage 2,290 Bcf (51 Bcf above year-ago, 140 Bcf above five-year average). Henry Hub June contract $2.86-$2.88, limited upside pressure, soft fundamentals, LNG maintenance at Freeport/Golden Pass suppressing demand. Shoulder-season weather supports continued large builds through late May. GEOPOLITICS: Negotiations remain fragile. Trump called off planned Tuesday strike at request of Gulf leaders due to "serious negotiations." Iran insists on retaining Strait control, US wants free commerce. Sticking points: Hormuz control and sanctions relief. Today's EIA report is catalyst. If draws continue, crude stays elevated. If builds appear, pullback possible. Gas in holding pattern, storage builds large, demand soft, prices stable. Capital preservation first.

Technicals: Week 21

Tuesday, May 19, 2026. CRUDE OIL TECHNICALS: WTI $102.35-$102.66, bullish momentum intact. RSI 51.27 (neutral, neither overbought nor oversold, room to run). MACD -0.08 (sell signal, mild bearish momentum but broader trend up). STOCHRSI 69 (Buy), Williams %R -35.78 (Buy), Ultimate Oscillator 59.29 (Buy). Overall: Strong Buy. Moving Averages: Most short-term (5/10/20-day) in Buy territory, 50-day mixed. Support: $97-$98 (former resistance, now support on dips), $95, $93.60 (short-term bearish threshold). Resistance: $104 (strong, recently tested), $104-$105 zone, $108-$110. Daily high projection $109.09. Pattern: Bullish momentum targeting $104+, profit-taking possible at resistance. Watch $100-$104 range. NATURAL GAS TECHNICALS: Henry Hub $3.02-$3.03, near seven-week high. Resistance: $3.024 (20-day Bollinger Band top), April highs near $3.25. Support: $2.888 (prior reactionary high, recent consolidation shelf), $2.680 (top of downward channel), $2.561 (April 14 low), $2.535 (20-day Bollinger Band bottom). Key pivot: $2.85-$2.88 shelf (recently reclaimed with volume on 4H/1H). Price broken above early-May consolidation but facing cooling demand forecasts. Failure to hold above $2.85-$2.90 could shift momentum bearish toward $2.60 zone. 2026 average forecasts: $3.50-$3.80-$5.00 range, strong support near $3.00 channel lower bound. Hotter U.S. weather boosting demand, offset by declining production and LNG maintenance. Crude bullish, gas consolidating near resistance, both watching geopolitical developments.