The petroleum futures rally continued Tuesday with West Texas Intermediate topping $66 and hitting a two-month high while overall futures contracts were lining up for gains in four consecutive trading sessions.

Buying has ramped up over the past couple of days as there has been a bit of a technical breakout, though technicians still see some space between current prices and some of the more critical resistance levels.

Sentiment may also be changing as U.S.-China trade talks are in their second day and neither party has walked away from the negotiating table in a "huff," trade sources said.

Additionally, on Monday in an analysis for clients, Morgan Stanley concluded that based on high-frequency data, increased quotas from OPEC and its allies haven't yet materialized into higher supplies in the market.

Under normal circumstances, refiners might be cheering a rally, but that may not be the case Tuesday as RBOB futures continue to lag oil gains and be outpaced by diesel which heading into midday was close to 6cts ahead of gasoline.

Front-month RBOB traded up to $2.1142 and was about a half cent below that heading into midday, trading at $2.1091/gal. The July high in mid-May was $2.148/gal, with several levels between current prices and the high being watched for signs of a breakout by technical analysts.

With positive momentum in trade talks and the probability of a recession waning, diesel prices were jumping, with the July contract up about 2cts at $2.165/gal about a cent below midmorning highs. Some of the backwardation is coming out of the July-August diesel contracts, and from August through December the diesel market is pretty flat.

WTI rallied to as much as $66.28/bbl before backing away slightly heading into midday. Technical analysts at ICAP still see some of the more significant objectives on the upside north of $68/bbl as July WTI was most recently trading at $66/bbl, up 71cts. The July contract was outperforming August, putting more backwardation into play. The August Brent contract was last trading at $67.71/bbl, up 67cts and just shy of the $68 peak seen earlier in the day.

This content was created by Oil Price Information Service, which is operated by Dow Jones & Co. OPIS is run independently from Dow Jones Newswires and The Wall Street Journal.

--Reporting by Denton Cinquegrana, dcinquegrana@opisnet.com; Editing by Michael Kelly, mkelly@opisnet.com

(END) Dow Jones Newswires

June 10, 2025 12:28 ET (16:28 GMT)

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