FX.co ★ Gasoline Hovers Near 7-Week Low

US gasoline futures hovered near $3.00 per gallon, remaining close to a seven-week low as markets continued to assess the chances of a diplomatic breakthrough in the Middle East. President Trump characterized ceasefire negotiations as being in their “final” stages, in contrast to Iran’s foreign minister, who earlier said the talks had stalled. These conflicting messages came amid a sharp escalation in violence earlier in the week. Heightening uncertainty further, Iran-backed Hezbollah rejected a US-brokered ceasefire proposal in Lebanon. The latest developments prolonged restrictions on tanker traffic through the Strait of Hormuz, a key chokepoint that handles roughly one-fifth of global oil consumption.

On the supply side, US gasoline inventories increased by more than 3 million barrels in the final week of May, ending a 15-week streak of declines. However, withdrawals of about 8 million barrels each from private crude stockpiles and the Strategic Petroleum Reserve (SPR) offset some of the apparent improvement in refined product availability.