WTI at $87 With $15 Geopolitical Premium as Hormuz Ceasefire Odds Fall to 30%, Lifting XLE

May ISM services index 54.5 vs 53.8 expected US May ADP employment data +122K vs +117K expected Iran foreign minister: Contact with the US has not been severed but no progress made Iran targeted a US military ship in the Gulf of Oman - report Fed's Beige Book continues to see slight-to-moderate US growth Geopolitical news: China, Iran, NATO, and chip shortage US EIA weekly crude oil inventories -7974K vs -4007K expected Netanyahu: Lebanon has been taken over by Hezbollah Fed's Williams: I'm not that worried about persistent impacts on inflation so far US factory orders for April 4.8% versus 4.6% estimate May US S&P Global services PMI 50.7 vs 50.9 prelim Canada Q1 labour productivity falls 0.5% Markets: Gold down $41 to $4444 US 10-yuear yields up 3.4 bps to 4.49% WTI crude oil up $2.27 to $96.03 S&P 500 down 0.6% Nasdaq Comp down 0.8% USD leads, NZD lags The dollar moves were substantial on Wednesday in a worrisome sign of geopolitical risk as oil rose another 2.5%. The reports of an imminent deal between the US and Iran have dried up and there's a sense we are at a turning point in the war as patience wears thin. In particular focus is USD/JPY as it rose above 160.00 and into the range where Japan will be tempted to intervene. Elsewhere, oil prices chopped around and hit $97 before fading to $94.40 and then rising back to $96.17.The bond market has started to notice rising oil as yields ticked higher. Outside of Iran-driven news, the AI trade showed a bit less resilience than usual. There were some attempts to drag stock markets higher but it was Nvidia that struggled, falling 3.6% in a continuation of yesterday's reversal. We also saw a big swing lower in software stocks, where were a main catalyst in the May rally. The IGV software ETF was down 4.3%. Alphabet shares also fell to the lowest since April in a 0.8% decline in the fourth day of losses; Microsoft was down 3.2%. On the flipside, Meta was up 4.2% on upgrades. The meme-like rally in MRVL after Jensen

Prior was -3327K Gasoline +3364K vs -513K expected Distillates +1502K vs -319K expected Refinery utilization +0.2% vs +0.3% expected API data released late yesterday: Crude -6750K Gasoline -3199K Distillates -214K WTI crude oil was up $1.10 to $94.92 ahead of the report. This article was written by Adam Button at investinglive.com.

Headlines: US president Trump reaffirms that Iran has agreed to not have a nuclear weapon Iran reserves right to defend against any country permitting US attacks EU says latest US tariffs on forced labour grounds are unjustified USD/JPY continues to poke and prod at intervention strike zone BOJ governor Ueda says will continue to raise policy rate if baseline outlook holds ECB policymaker Elderson says prolonged war increases likelihood of second-round effects SNB Chairman Schlegel says medium-term inflation pressure is basically unchanged Eurozone business activity struggles further in May amid surging price pressures UK May final services PMI 49.3 vs 47.9 prelim How likely is a U.S. debt crisis? Markets: WTI crude up 2% to $95.70 European indices lower, DAX down 0.9% while CAC 40 down 0.4% S&P 500 futures down 0.1% USD a little higher, USD/JPY volatility swings after nearing 160 US 10-year yields up 2.8 bps to 4.48% Gold down 0.5% to $4,463 It was a more pensive session as we continue to wait on whether or not the US and Iran will strike a deal this week. But by the look of things, it seems that both sides are still finding it hard to meet in the middle especially on key terms. US president Trump came out to reaffirm that Iran has agreed to not have a nuclear weapon. But as a reminder, this notion of a baseline promise was denied by Tehran previously last week already. Besides that, he also said that the US naval blockade may stay the course until Labour Day. If so, that means it will be another three more months of this with the naval blockade being lifted supposed to be a key condition for Iran in this framework agreement. So, make what you will of that. Markets remain unfazed for the most part despite the mix of headlines. However, oil prices are continuing to push up with WTI crude up 2% to $95.70 on the day. In the equities space, we are seeing a more tepid mood with European indices falling off while US futures are sitting marginally lower on the day. Ge

WTI crude futures have risen nearly 10% in three days as hopes for a quick peace deal fade.

Sree Kochugovindan, Senior Research Economist at Aberdeen Investments, focusing on current market sentiment. The recent decline in Brent crude prices, which dropped by 0.72% to $94.30 per barrel. The segment aims to provide insights into the factors influencing investor confidence and market dynamics in the Middle East and Africa region. (Source: Bloomberg)

There have been various reports about whether the US and Iran are talking. Now Rubio says that talks are continuing. Another notable line from him is that "there is a prospect that Iran has agreed to negotiate aspects of nuclear program that they previously refused to mention in discussions". So that's potentially positive. WTI crude oil is down 25 cents to $91.91 but is up from the session low of $90.12. This article was written by Adam Button at investinglive.com.

West Texas Intermediate and Brent crude’s front-month contracts both edged lower after hitting monthly highs during Monday’s session.