Ceasefire agreement nears, triggering a wave of sell-offs! Oil prices suffer the worst weekly decline in six weeks, as funds accelerate their withdrawal from the energy market.

Notice that, as the United States and Iran seem to be close to reaching a preliminary agreement, including the reopening of the Strait of Hormuz, crude oil futures prices fell to the lowest level since mid-April. Following long-term uncertainty about the status of an agreement to extend the current ceasefire agreement for 60 days (during which discussions on the future of Iran's nuclear program will continue), President Trump stated in a social media post on Friday morning that he will make a "final decision" on the agreement. Iran's Fars News Agency stated that the agreement requires Iran to open the strait unconditionally, but after Iran insisted on regulating traffic (including collecting transit fees), they stated that they would reopen the waterway "according to arrangements they have predetermined". Alan Suderman of StoneX wrote, "Capital flows are trading the 'risk' of a potential peace agreement over the weekend, with money generally moving out of energy, grains, and oilseed markets. Traders will closely monitor news headlines throughout the weekend to see if they continue this trend on Sunday night or reverse it." However, as the war enters its third month, Royal Bank of Canada Capital Markets Global Commodity Strategy Director Helima Croft stated in a report, "The shock absorber for global energy is rapidly eroding, and there is little time left to reopen the strait and prevent a 'hard landing' for oil prices." Chevron CEO Mike Wirth stated in an interview that several ships passing through the Strait of Hormuz have been attacked in recent days, underscoring the "very real" risks that ship owners in the Persian Gulf still face, regardless of whether a peace agreement is signed. "There are still kinetic confrontations (military conflicts) this week, some of which have been reported by the media and others that have not," Wirth said, but he added, "The market's psychological expectation is that this is closer to ending than beginning." On Friday, the New York Mercantile Exchange near-month crude oil futures for delivery in July fell 1.7% to $87.36 per barrel; Brent near-month crude oil futures for delivery in July fell 1.8% to $92.05 per barrel, both benchmark oil prices hitting their lowest closing since April 17. WTI crude oil plummeted 9.6% this week, marking the largest weekly decline in six weeks; Brent crude oil plummeted 11.1%, marking the most brutal weekly decline in seven weeks. In addition, the New York Mercantile Exchange near-month natural gas futures for delivery in July closed relatively unchanged, rising by 0.1% to $3.290 per million British thermal units (MMBtu), reaching the highest closing price since February 6.