Energy Update - Morning Express - Blue Line Futures

***Abbreviated reports until Wednesday July 8th - Wednesday report scheduled for late afternoon - other reports to follow the regular schedule. 

Update:

Summary:

Technical support has held at 65.66-66.30*** , which is good. This support zone is an absolute must hold, and represents Crude's last stand, which is bad.

Fundamentals pave the road while technicals provide the guard-rails. This is a very simplified framework for how I analyze markets. I've worked to develop and improve this process professionally over the past 15 years. I have, and still do (Blue Creek / Blue Line Capital), rely on the results (Profit & Loss) from this process to pay rent and eat food - so there is great effort behind the calls and analyses you see here, I don't do it to sell newspapers or get likes on tik-tok. Unfortunately, sometimes, this process and my calls are still wrong. It's the nature of this game. I have been adamant that selling-pressure and downside will come if the Strait reopens, but I have been wrong on how far this will drive price lower, and how quickly supply levels would come through on the bull side to offset Strait reopening pressures. My bullish call on this last leg below $80 has been wrong - and if this level breaks and holds below into next week - I am throwing in the towel on my bullish crude bias.  

Key Headlines:

• China Returns

  • Saudi Arabia made a rare spot market sale - filling 3 super-tankers (6mln bbls) bound for Korea, Japan, and China

  • From a supply-shock perspective, this is bearish. From a demand perspective, it’s bullish as China—the world’s largest crude buyer—is returning to the market.

• Tankers escape Hormuz using a convoy pattern, still under threat

  • Oil through Strait of Hormuz now up to 10mln bbls/day
  • Tankers skirting Iranian tolls were struck last weekend

• We remain bullish based upon the fundamental balance sheet - market sentiment continues to weigh and price action continues to disappoint 

• Omani Crude basis collapses to -$4.00/bbl under Brent contract
• "Overbought" macro thesis of Chairman Warsh hiking rates
  • Expectations for Fed Rate decisions are (in my opinion) overextended to the Hawkish (higher rates) side of the spectrum.
  • As the markets expectations, and this trade, reverse course - the US Dollar should weaken - bullish crude demand
• Saudi Arabian export flows ran ~6.3m b/d over the past week — in line with their 2025 run-rate and ~90% of February levels.
  • But - must continue at this run rate to sustain further downside
  • Short term jolt to shipping figures from large scale convoy sent to China, Korea, Japan
  • Hinges on flimsy ceasefire, obviously
• Weekend War to continue?
  • The US and IRGC have resumed strikes on one another the past three weekends, only to stop on Sunday's into the Crude Oil opening

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Fundamental View:

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.  

6/17/2026 - The details of the MOU have been released to the public and it's a tough look for the US. From Iran's standpoint it's less stringent than Obama's 2015 deal and we send them $300bln.  

Previously 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. 

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Macro Update:

....coming soon 

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Technical Summary:

07/03/2026 Update : Key support from Iran war gap at 65.66-66.30***. Near term resistance at the 200 Day moving average, and key initial sell-off (3/10/2026) lows is at  70.18***. This will be the first key test for bulls. Below 65.66-66.33*** and we're in bad shape.  Initial key support below Iran war levels starts at the 63.39-63.96** region, but we have low confidence in this zone's relevance . 

Bias: Bullish-Neutral

Resistance: 70.18*** | 73.64-74.75*** | 78.00-78.58*** | 81.68-82.57***

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

Support: 65.66-66.30*** | 63.39-63.96**

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Intraday Chart (30 mins):

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