Today was the second real day of selling in the oil market since the war in Iran began.
Oil opened higher but the peak was just minutes into the day and it trended lower afterwards. There was a decent bounce midday in the US but the selling took over late aand WTI finished at $93.50, or 53-cents above the intraday low.
This is a rare win for the oil bears but in the prior washout last week, it was a big opportunity for the bulls to add and the week finished with three straight gains.
Also note what's happening further out the curve. The volume in crude is now nearly equal in the May contract. I didn't fall as much as the April market and it was the same thing all the way down the line.
The market is obviously sensing some better news at the moment.
On the weekend, Trump sounded like a panicked mess as he threatened Iran's Kharg island then asked for help from allies. But in a press conference today he was more measured and projected some level of calm regarding a war that doesn't appear to have easy solutions to protecting a narrow strait just 12 miles from the coast of Iran, along with 1000 miles of coast line.
I would still say the main positive headline was Iran indicating it would allow oil to pass through that wasn't connected to Israel, the US or its allies. That could potentially fill much of the gap, especially with Iran already pumping and shipping its own oil.
As for what's next, we will watch the headlines out of the region, whether that be more shipping or infrastructure attacks or something else. For now, Trump is indicating a holding pattern but we will see what targets are hit and what Iran does in response.
