Overview
- WTI closed near $87.36 on Friday as investors booked losses, leaving crude benchmarks with mid-teens percentage drops for May that marked their worst monthly declines in years.
- The selloff followed reports that U.S. and Iranian negotiators reached a preliminary understanding to extend a ceasefire for about 60 days and allow transit through the Strait of Hormuz.
- Published descriptions of the understanding include deactivating mines, lifting some U.S. naval restrictions and talks on sanctions and frozen funds but officials on each side have given different accounts and details remain tentative.
- Other fuel markets also fell in May with U.S. gasoline down roughly 13.5 percent and U.S. natural gas down about 7.9 percent while Mexico’s export blend briefly traded above Brent at $92.72, according to Pemex.
- International agencies warn that global supply would be strained if the route closes again and markets remain fragile because intermittent attacks continue, so traders are watching demining, formal pact terms and any changes to sanctions or frozen assets next.