ETO Markets Global Pulse: Oil Slides 2.77% to Four-Month Low

Market Review

According to ETO Markets monitoring, on July 1 (Wednesday), WTI crude fell for a third straight session and closed at USD 68.09 per barrel, down 2.77% on the day. Brent crude dropped 3% to USD 71.13 per barrel. Both benchmarks reached their lowest levels in four months.

Positive signals from US-Iran talks eased concerns over shipping through the Strait of Hormuz and potential supply disruptions.

On July 2 (Thursday) during early Asian trading, WTI crude extended its decline and traded near USD 67.80 per barrel.

Global Headlines

US Iran Reach Asset Deal

The US and Iran reached an agreement to release part of Irans frozen overseas assets. The funds will be placed in a US-controlled escrow account. Washington said the money would be used to purchase US corn, wheat, soybeans, food, and medical supplies.

Iranian central bank governor Abdolnaser Hemmati said Iran was not required to purchase US agricultural products. He added that Tehran would decide how to use the funds based on national interests, pricing, and product quality.

Iran Seeks Phased Memo Execution

During indirect US-Iran talks in Doha, the Iranian delegation called for phased implementation of the memorandum. Tehran wants the frozen-assets provision implemented first, with funds transferred to Irans central bank to support food supplies.

Iran also maintained that the Strait of Hormuz falls under Iranian and Omani jurisdiction. It rejected unauthorized shipping routes and reaffirmed its commitments under the Nuclear Non-Proliferation Treaty and cooperation with the IAEA.

Iran Forms US Compliance Panel

Iranian Deputy Foreign Minister Kazem Gharibabadi said Iran reviewed alleged US violations of commitments related to ending the conflict in Lebanon during trilateral talks with Qatar and Pakistan.

The discussions also covered increased US military deployments and threatening statements. Iran plans to establish a monitoring group to report and review violations through direct communication channels.

Warsh Ends Forward Policy Guidance

FED Chair Kevin Warsh said the FED would no longer provide forward guidance on future interest-rate policy and would “chart a new path.” He said he wants a full internal debate at the next policy meeting.

The FED has already established five special working groups covering communication, the balance sheet, data use, productivity, employment, and the inflation framework.

Warsh Rejects Rapid Balance Reduction

Warsh said the FED still needs to reduce its balance sheet, but any major policy adjustment will take time. Changes would be discussed publicly and communicated to markets before implementation.

He said the current balance sheet has taken on some characteristics of fiscal policy. However, he would not pre-commit to a specific direction and wants interest rates to remain the FEDs primary monetary policy tool.

ETO Markets Analyst View (WTI Oil)

WTI crude remains in a bearish weekly structure, with the technical model identifying 81.70 as the key turning point. As long as prices remain below this level, the broader weakness has not reversed.

The model previously highlighted 78.50 and 76.50 as downside targets. A break below 78.50 was expected to increase the risk of a move toward 76.50.

If WTI rebounds above 81.70 and holds there, downside pressure may ease. Upside could then test 83.50 and potentially extend toward 85.50.

Current prices have already fallen below the models 78.50 and 76.50 target zones. These levels may now act as resistance during any future rebound.

The market continues to reprice US-Iran negotiations, frozen-asset arrangements, and the shipping framework for the Strait of Hormuz. Traders should carefully assess market timing and risk exposure.

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