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\n\tMeanwhile, U.S. crude, gasoline inventories decline – but far less than in previous weeks: File Image\/Pixabay.<\/p>\n
\u201c<\/p>\n \n\tToday’s one of those days where geopolitics take over<\/p>\n Tim Ghriskey, senior portfolio strategist, Ingalls & Snyder<\/p>\n
\n\tIn a repeat of recent trading patterns, oil on Wednesday dropped again as media and Washington reported that a peace deal between the U.S. and Iran was getting closer to reality \u2013 but U.S. president Donald Trump claimed<\/a>\u00a0the Islamic republic was \u201cnegotiating on fumes,\u201d and Iran warned that its military was \u201clying in wait\u201d if the brash billionaire restarted combat.<\/p>\n
\n\tAnother sign that force, not diplomacy may ultimately settle the hostilities between the U.S. and Iran was the Czech Republic, whose foreign minister Petr Mainka said<\/a>\u00a0Prague had begun discussions about contributing specialized capabilities to help secure the Strait of Hormuz, adding, \u201cWe have some unique passive surveillance capabilities.”<\/p>\n
\n\tOil trading was also clouded by contradictory statements: Iran\u2019s state TV claimed<\/a>\u00a0it obtained a draft of an initial understanding between Washington and Tehran toward ending the conflict, in which Iran would restore shipments through the Hormuz to pre-war levels within a month \u2013 but Washington said the report was false.<\/p>\n
\n\tBrent eased 0.5 percent to $99.06 per barrel after surging nearly 4 percent in the previous session; West Texas Intermediate for July delivery declined 0.9 percent to $93.09 per barrel.<\/p>\n
\n\tTim Ghriskey, senior portfolio strategist at Ingalls & Snyder, remarked<\/a>, “Today’s one of those days where geopolitics take over, with competing statements coming in fast and furious; there’s so much news out there.”<\/p>\n
\n\tMeanwhile, the American Petroleum Institute estimated<\/a>\u00a0that U.S. crude inventories fell by 2.8 million barrels in the week ending May 22, compared to a plummet of 9.1 million barrels the week prior; gasoline inventories declined by 3.1 million barrels in the same time frame, compared to a 5.8 million barrel draw the week prior.<\/p>\n
\n\tIn other oil news on Wednesday, Japan will officially switch<\/a>\u00a0the benchmark for calculating gasoline price subsidies back to Dubai crude prices from Brent crude, effective June 4, after Dubai crude prices stabilized and the gap between Dubai and Brent narrowed.<\/p>\n
\n\tThe Iran war exposed Japan\u2019s dependence on Middle Eastern crude as its defining structural vulnerability: the Hormuz blockage effectively closed transport of over 95 percent of Japan\u2019s crude oil imports.<\/p>\n