Energy Update - Morning Express - Blue Line Futures

Update:

Despite last weeks escalation, the US and Iran reportedly signed a "Memorandum of Understanding" to reopen the Strait yesterday. The memorandum, extends the current ceasefire for 60 days and does not formalize any agreements on Iran's nuclear program, economic sanctions, or payments from the US. Despite the agreement, Israel struck southern Lebanon yesterday, leading to a rebuke of Netanyahu from Trump. While the memorandum formally agrees upon nothing, it does take some tail-risk out of the market and certainly makes sentiment a headwind for the bulls. 

According to Bloomberg's Hormuz Tanker Vessel tracking, yesterday saw 1 tanker cross and so far today there have been zero. We'll be tracking this index closely as we monitor the Strait reopening. (Pictured below intraday chart).  

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Fundamental View:

Currently held outlook: We remain bullish on the medium- to long-term fundamentals, especially in the longer-dated months. 

We are likely facing a semi-permanent 9 million bbl/day hole in the supply-and-demand balance sheet. China has put the brakes on imports, but it will only let its stocks dwindle for so long. Global strategic reserves have also been drained, and Ukraine has been successful in quietly knocking out more and more Russian oil infrastructure. 

Update 6/16/2026 - Now that this "MOU" is signed, the top-end ($150+) of pricing risk is less of a fat tail than it was previously. Despite this, global supplies remain suppressed and will collide with the resumption of Chinese buyers in rebuilding stockpiles. Our take has been that even with a ceasefire deal in place, the fundamentals tilt bullish - so yes, we remain bullish despite a preliminary agreement to discuss a ceasefire has been signed.  

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Macro Update:

Inflation has run hot with energy prices driving most of the beat. Energy prices will continue to drive higher inflation alongside naturally rising prices, as has been our view for some time. PPI, a leading indicator of CPI, showed a ramp in services cost and demand. This adds to our held outlook on ramping inflation. 

Earnings season in equities has been showing outsized beats by the big tech names and companies with clear secular catalysts. Businesses that aren't supported by AI, Electrification, the Commodity Boom, or the Global Defense Super-Cycle (Japan, Europe, developed Middle East) are showing lackluster results. Financial conditions are very easy/loose, bordering on exuberant with credit markets following suit. 

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Technical Summary:

Our fundamental tilt is bullish but we are currently trading below all technical support until the 200-Day around $73. If we don't close above the key support of $78.97*** today there is nothing but air until that 200-Day. It's not a good setup technically with this support level broken - do not cannonball in no-mans land.  

6/15/2026: Support levels are lacking in this region. A low of 78.97*** is about all we have left. Fundamentally we remain tilted bullish, but recognize that the fight will be harder with the memorandum of nothing being signed.       

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Bias: Bullish-Neutral

Resistance:  104.34-105.15***; 108.89-110.93*** 

Longer Term Pivot & Point of Balance: 59.75-60.00***

Support: 97.95**; 98.17-99.65***; 100.66**; 89.03** ; 92.04-93.16***; 85.45-88.13***; 78.97***

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