The Jun’25 Brent futures contract saw another volatile morning, prices jumped by $0.85/bbl to $65.27/bbl at 09:28 BST and have since some support at $65.29/bbl at 12:00 BST (time of writing). Bloomberg reports that China is open to talks if Trump shows respect. Iran’s Foreign Minister Abbas Araghchi stated that Iran’s uranium enrichment capability is non-negotiable, rejecting any potential compromise in talks with the U.S. aimed at reviving a nuclear deal. The negotiations, which began Saturday, focus on ensuring Iran doesn’t pursue nuclear weapons in return for sanctions relief. Iran insists its nuclear program is strictly for civilian purposes like energy and medical use. In other news, Ampol, Australia’s leading fuel retailer, reported a 49% decrease in first-quarter refining margins at its Lytton refinery, dropping to $6.07/bbl from $11.80/bbl a year earlier. The decline is attributed to weakened refining margins in Singapore and the impact of Cyclone Alfred, which caused approximately ten days of lost production and increased demurrage costs due to infrastructure damage. US crude inventories rose by 2.4 mb last week, according to the American Petroleum Institute (API), defying analyst expectations of a 1.68 mb decline. This would mark a year-to-date increase of over 24 mb for US crude inventories. The Strategic Petroleum Reserve also gained 0.3mb, though levels remain far below pre-withdrawal totals under the Biden administration. Gasoline inventories dropped by 3 mb, aligning with the five-year average, while distillates fell by 3.2 mb, deepening the existing supply deficit. Cushing inventories rose by 349 kb, extending last week’s barrel hike. Finally the front month Jun/Jul spreads and the 6-month Jun/Dec spreads are at $0.82/bbl and $2.42/bbl respectively.
