<div id="readability-page-1"><div> June WTI crude oil (CLM26) on Tuesday closed down -0.89 (-0.82%), and June RBOB gasoline (RBM26) closed down -0.0645 (-1.72%). Crude oil and gasoline prices retreated on Tuesday after the dollar index ($DXY) jumped to a 6-week high. Crude prices also moved lower after President Trump late Monday said he called off a strike on Iran scheduled for Tuesday after Gulf allies asked for more time to give diplomacy a chance. Losses in crude were limited as the Strait of Hormuz remains closed, tightening global oil supplies.Hopes that a peace deal to end the US-Iran war is near are undercutting crude prices after President Trump on Tuesday said that Iran is &#34;being reasonable&#34; and that he will &#34;maybe&#34; give them until early next week to make a peace deal. Don’t Miss a Day: From crude oil to coffee, sign up free for Barchart’s best-in-class commodity analysis.Crude prices added to their losses on Tuesday after a senior NATO military official said the group is considering helping ships pass through the Strait of Hormuz if the waterway isn't reopened by early July. Ramped-up geopolitical tensions are supportive for crude prices after Reuters reported Monday that Pakistan has deployed 8,000 troops, a squadron of fighter jets, and an air defense system to Saudi Arabia as part of a mutual defense pact, a deployment described as a &#34;substantial, combat-capable force&#34; to support Saudi Arabia if it comes under further attack. On Sunday, the UAE reported that a drone sparked a fire in a power station at the United Arab Emirates' Barakah nuclear plant, and Saudi Arabia said it intercepted and destroyed three drones that entered its airspace.Last Wednesday, the International Energy Agency (IEA) said in a monthly report that global observed oil inventories declined at about 4 million bpd in March and April, and that the market will remain &#34;severely undersupplied&#34; until October, even if the conflict ends next month. Energy prices remain underpinned by the US-Iran war, which is keeping the Strait of Hormuz essentially closed. The ongoing conflict is exacerbating global oil and fuel shortages, as about a fifth of the world's oil and liquefied natural gas transits through the strait. Goldman Sachs estimates that crude output in the Persian Gulf has been curtailed by about 14.5 million bpd, and that the current disruption has drawn down nearly 500 million bbl from global crude stockpiles, which could hit a billion bbl by June. Persian Gulf oil producers have been forced to cut production by roughly 6% due to the closure of the Strait of Hormuz as local storage facilities reach capacity. Last Thursday, the IEA said that more than 80 energy facilities had been damaged during the conflict, and that recovery could take as long as 2 years.In a bearish factor for crude, OPEC delegates said last Thursday that the cartel aims to continue a series of oil quota increases over the next few months, completing the return of halted oil production by the end of September. The group already formally agreed to restore about two-thirds of the 1.65 million bpd supply cutback it made back in 2023 and said it plans to raise output targets further and to revive the final portion in three more monthly stages. On May 3, OPEC+ said it will boost its crude output by 188,000 bpd in June after raising production by 206,000 bpd in May, although any production hike now seems unlikely given that Middle East producers are being forced to cut production due to the Middle East war. OPEC's April crude production fell by -420,000 bpd to a 35-year low of 20.55 million bpd.Vortexa reported on Monday that crude oil stored on tankers that have been stationary for at least 7 days rose +2.7% w/w to 105.11 million bbl in the week ended May 15.The most recent US-brokered meeting in Geneva to end the war between Russia and Ukraine ended early as Ukrainian President Zelensky accused Russia of dragging out the war. Russia has said the &#34;territorial issue&#34; remains unresolved with Ukraine, and there's &#34;no hope of achieving a long-term settlement&#34; to the war until Russia's demand for territory in Ukraine is accepted. The outlook for the Russia-Ukraine war to continue will keep restrictions on Russian crude in place and is bullish for oil prices.Ukrainian drone and missile attacks have targeted at least 30 Russian refineries over the past ten months, limiting Russia's crude oil export capabilities and reducing global oil supplies. There were at least 21 Ukrainian strikes on Russia's refineries, export terminals, and oil pipeline infrastructure in April, knocking Russia's average refinery runs to 4.69 million bpd, the lowest in 16 years, according to Bloomberg data. Also, US and EU sanctions on Russian oil companies, infrastructure, and tankers have curbed Russian oil exports.The consensus is that Wednesday's weekly EIA crude inventories will fall by -2.5 million bbl, and gasoline supplies will fall by -2.16 million bbl.Last Wednesday's EIA report showed that (1) US crude oil inventories as of May 8 were -0.3% below the seasonal 5-year average, (2) gasoline inventories were -4.3% below the seasonal 5-year average, and (3) distillate inventories were -9.4% below the 5-year seasonal average. US crude oil production in the week ending May 8 rose +1.0% w/w at 13.710 million bpd, mildly below the record high of 13.862 million bpd posted in the week of November 7.Baker Hughes reported last Friday that the number of active US oil rigs in the week ended May 15 rose by +5 to 415 rigs, modestly above the 4.25-year low of 406 rigs posted in the week ended December 19. Over the past 2.5 years, the number of US oil rigs has fallen sharply from the 5.5-year high of 627 rigs reported in December 2022. On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here. The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. </div></div>

Crude oil prices fell on Tuesday, with June WTI down 0.82% amid diplomatic hopes to resolve the US-Iran conflict. President Trump postponed a planned strike on Iran, citing Gulf allies' requests for more time for diplomacy. Despite the closure of the Strait of Hormuz tightening global supplies, geopolitical tensions remain high, with NATO considering support for shipping in the region. OPEC plans to increase oil production, but ongoing conflicts are limiting output, exacerbating global shortages.

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Crude Oil Prices Slip on Diplomatic Hopes to End Iran War