Tradingkey – On July 3, Eastern Time, the US stock market is closed today due to the Independence Day holiday. Trading of precious metals, energy, foreign exchange, US Treasuries, and stock index futures contracts under the Chicago Mercantile Exchange (CME) ended early at 13:00 ET. Trading of Brent crude oil futures contracts under the Intercontinental Exchange (ICE) ended early at 13:30 ET.
At present, the two major crude oil futures are trading flat, with prices hovering around $68. The overall market has entered a phase of cooling down. The core driver of the market correction stems from the convergence of risk premiums driven by the rapid easing of geopolitical tensions in the Middle East, as well as the restoration of supply-side expectations pushed by the gradual recovery of global energy transport channels. The market is still waiting for the next catalyst.
As of press time, WTI crude oil futures rose 0.09% to $68.75; Brent crude oil futures rose 0.18% to $71.93.
[Source: FutuBull]
In its latest research report, Citi predicts that Brent crude will fall to the $60 to $65 per barrel range by the end of the year as the situation in the Strait of Hormuz normalizes. Citi stated that fundamentals are rapidly regaining dominance in the market. Shipping traffic is normalizing, the physical crude market has softened significantly, and inventory drawdowns are much lower than expected.
The core basis for Citi’s bearish view on oil prices is that the ceasefire agreement between the US and Iran will remain in effect. Analysts at the bank stated that although short-term frictions cannot be ruled out, both sides have sufficient incentive to maintain the agreement. The memorandum of understanding is expected to remain in effect and escalate into a formal agreement in the coming months, primarily because the benefits of de-escalation far outweigh the costs of confrontation for the US, Iran, and most of the Middle East.
On the other hand, the latest ship tracking data shows that on Thursday, four supertankers loaded with crude oil at Saudi Arabia’s main oil and gas export hub appeared in the Gulf of Oman. This is the largest departure volume since the peace agreement took effect about two weeks ago.
In addition, Saudi Arabia’s crude oil exports have surged close to pre-war levels since it resumed tanker loading in the Persian Gulf. In the six days ending Wednesday, Saudi Arabia’s daily exports reached 6.3 million barrels. This brings its crude oil flows largely in line with its 2025 average and to nearly 90% of its level in February this year.