Oil prices—past, present, and futures

Daily update

Crude oil futures reached pre-war levels, anticipating future oil flows through the Strait of Hormuz. Current oil flows are only a fraction of pre-war levels, and oil refineries refine actual oil, not hypothetical future oil. Consumer (refined) gasoline prices in the US remain around a third higher than pre-war prices (in the UK, petrol prices are around 10% higher, reflecting different tax structures). Prices should fall over time, but the potential political cost has provoked the ire of US President Trump.
US consumers are in focus with May income and spending data. The US consumer has shown an impressive determination to keep shopping throughout the tariff and oil price shocks, cutting savings as real income growth turned negative. There is no reason to suppose this has not continued.
Revised first-quarter US GDP is unlikely to get too much market attention. The investment in AI means US durable goods orders may be slightly more interesting, but AI equipment is not really a “Made in the USA” story.
Europe has nothing of note on its data calendar, but there are yet more European Central Bank (ECB) speakers, including Chief Economist Lane. There are times when there might be too much of a good thing—today’s roster brings the number of ECB appearances this week to fourteen.