WTI crude oil futures dropped more than 1% to around $66.2 per barrel on Tuesday, hitting its lowest level in nearly two weeks, after US President Donald Trump said that Israel and Iran have agreed to a ceasefire, alleviating fears of supply disruptions in the Middle East. Trump implied that the ceasefire was set to begin late on Monday, with Iran halting its attacks first, followed by Israel in the coming hours. If both sides maintain peace, the war will officially end after 24 hours, concluding a 12-day conflict. The announcement came just hours after Iran fired missiles at a US military base in Qatar in retaliation for US strikes on its nuclear facilities. US defenses intercepted the missiles and no casualties were reported, which led prices to settle over 7% lower on Monday. The de-escalation has eased concerns that Iran might attempt to block the Strait of Hormuz, a critical chokepoint through which roughly 20% of the world’s oil passes.
US natural gas futures dropped nearly 5% to $3.7/MMBtu, retreating from last week’s 11-week high of $4.09, as rising production and forecasts for an easing heat wave pressured prices. While recent extreme heat across the eastern US had boosted power demand and prices, meteorologists expect above-normal temperatures to persist only through early July. LSEG reported average gas output in the Lower 48 states rose to 105.5 bcfd in June, up from 105.2 bcfd in May but still below March’s record 106.3 bcfd due to earlier maintenance. Meanwhile, gas flows to the eight major US LNG export plants fell to 14.1 bcfd in June from 15.0 bcfd in May, largely due to seasonal maintenance. Markets remain cautious amid ongoing geopolitical tensions in the Middle East, with traders closely watching for Iran’s response to recent US strikes on its nuclear sites. Any escalation risks disrupting LNG shipments through the vital Strait of Hormuz, which handles around 20% of global LNG flows.
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