Oil futures: Crude prices ease as markets absorb death of Iranian President

Quantum Commodity Intelligence – Crude oil futures Monday were slightly down, as confirmation from Iranian state media that President Ebrahim Raisi had died following a helicopter crash was largely absorbed by the market without major volatility.

Front-month Jul24 ICE Brent futures were trading at $83.61/b (1615 GMT), compared to Friday's settle of $83.98/b.

At the same time Jun24 NYMEX WTI was trading at $79.77/b versus Friday's settle of $80.06/b. The more-liquid Jul24 contract was trading at $79.27/b, against the pre-weekend close of $79.58/b.

Iran's president died after the helicopter carrying him back from a visit to the Azerbaijani border crashed in poor weather conditions, killing all on board, including Foreign Minister Hossein Amirabdollahian.

While analysts said that the death of Raisi, viewed by the West as a hardliner, does not immediately change the geopolitical landscape of the Middle East, it could add to an already tense situation in the region.

However, with nothing to suggest anything other than an accident, oil markets largely parked the developments and moved on, although traders remained on alert in case of further developments. 

OPEC

More broadly oil prices remain towards the lower end of the trading range in place since the start of April, while investors will be on alert for any signalling ahead of the 1 June OPEC meeting.

"We might have to wait for further clarity from OPEC+ and its output policy for the second half of the year to provide any impetus to the market and for it to break out of its recent range," said Warren Patterson, head of ING's commodity research, although noting that a significant volume of spare OPEC capacity had helped numb markets to geopolitical developments.

Weekend reports that Washington and Riyadh are close to an agreement for US security guarantees and civilian nuclear assistance helped calm regional tensions, although the reports indicated that an Israel-Saudi normalisation deal remains beyond reach for now.

Separately, Saudi Arabian Crown Prince Mohammed bin Salman has been forced to postpone a visit to Japan due to the king's health. However, the Crown Prince has largely been running the Kingdom in recent years in place of his ageing father.

Meanwhile, analysts said that financial measures from China had lifted sentiment, including Beijing announcing a $41.5 billion package to help clear excess housing inventory in an effort to boost the beleaguered property sector.